SEC Charges California Software Consultant with Insider Trading

8/11/2018/US SEC

The Securities and Exchange Commission yesterday charged a California-based software consultant with insider trading based on material, nonpublic information he misappropriated from his brother, an executive at Surgical Care Affiliates, Inc., an Illinois-based healthcare company.

The SEC alleges that Slobodan Dragojlovic misappropriated from his brother material, nonpublic information that Surgical Care Affiliates was in negotiations to be acquired by UnitedHealth Group, Inc. According to the complaint, Dragojlovic purchased Surgical Care stock after his brother told him in confidence of the pending acquisition at a family holiday party in December 2016. After the acquisition was announced on January 9, 2017, Surgical Care’s stock price increased, and Dragojlovic sold his stock, realizing illicit profits of more than $20,000.

The SEC’s complaint, filed in federal district court in the Central District of California, charges Dragojlovic with violations the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Without admitting or denying the allegations in the SEC’s complaint, Dragojlovic consented to the entry of a final judgment that permanently enjoins him from future violations, and orders him to pay disgorgement of $20,101, prejudgment interest of $1,038, and a civil penalty of $20,101.

The SEC’s investigation was conducted by David T. Frisof and Darren E. Long, and supervised by Brian O. Quinn and Carolyn M. Welshhans. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

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