June 18, 2019/US SEC
The Securities and Exchange Commission announced settled insider trading charges against Raymond Starker for selling shares of Energy Focus, Inc. while allegedly in possession of material, nonpublic information about a planned secondary offering of Energy Focus securities.
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Starker, a resident of Englishtown, New Jersey, had longtime personal relationships with an Energy Focus director, a company executive, and an individual affiliated with an investment bank that sought to participate in the offering. According to the complaint, Starker communicated regularly with these individuals and received confidential information about the planned secondary offering. The complaint alleges that, based on that information, Starker sold 9,400 shares of Energy Focus in the month before the September 11, 2015 public announcement of the planned offering. After the public announcement, the stock price of Energy Focus dropped by more than 28%. By selling his shares before the public announcement, Starker allegedly avoided losses of approximately $46,342.
Without admitting or denying the allegations in the complaint, Starker consented to a final judgment permanently enjoining him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. Additionally, Starker agreed to pay $46,342 in disgorgement, $7,047 in prejudgment interest, and a $46,342 civil penalty. The settlement is subject to court approval.
The SEC’s investigation was conducted by Devon Leppink Staren, and was supervised by Stacy Bogert and Antonia Chion. The SEC appreciates the assistance of the Financial Industry Regulatory Association.