Boston-Area Defendant in SEC Insider Trading Case Convicted in Criminal Case

11/10/2018/US SEC

The Securities and Exchange Commission announced today that on October 9, 2018, Harold L. Altvater was convicted on three counts of securities fraud after a criminal trial before a jury.

The Commission previously charged Altvater and two other individuals with insider trading in civil actions filed on June 27, 2017. The criminal charges against Altvater are based on the same conduct underlying the SEC’s action against him. The SEC’s complaint alleged that on three occasions between October 2013 and January 2014, Altvater traded in Ariad’s stock in advance of announcements about the safety profile and U.S. Food and Drug Administration (FDA) approval status of Ariad’s only FDA-approved drug. According to the SEC’s complaint, Altvater illegally traded on the basis of non-public information he learned from his wife, an Ariad employee. Altvater allegedly traded in Ariad stock shortly after his wife learned material non-public information regarding Ariad’s ongoing dealings with the FDA. By purchasing shares ahead of a positive announcement, and selling shares ahead of negative announcements, Altvater allegedly avoided losses and obtained insider trading profits totaling $102,026. Further, the SEC’s complaint alleged that Altvater tipped a friend, who also profited by trading Ariad stock on the basis of non-public information learned from Altvater’s wife.

The SEC’s action against Altvater is ongoing. The SEC charged Altvater with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and is seeking a permanent injunction, disgorgement plus prejudgment interest and a civil penalty.

The SEC appreciates the efforts of the U.S. Attorney’s Office for the District of Massachusetts in prosecuting this matter. SEC Attorney Michael Vito served as a Special Assistant United States Attorney in the criminal trial. The SEC also appreciates the assistance of the Federal Bureau of Investigation and the Financial Industry Regulatory Authority.

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