November 23, 2021/US SEC
On November 22, 2021, the United States District Court for the Southern District of New York entered a final consent judgment against Israeli citizen Dov Malnik in connection with his participation in a prolific insider trading scheme. To settle the charges against him, Malnik agreed to pay a civil penalty of more than $2.8 million and consented to injunctive relief.
According to the SEC’s complaint, filed in March 2020, Malnik generated millions of dollars in profits by trading in the securities of U.S. public companies in advance of news that these companies had been targeted for acquisition between 2013 and 2015. Malnik allegedly received the illicit tips through a network that included two London-based investment bankers, both of whom the SEC charged in October 2019. Malnik carried out the alleged scheme by trading in a variety of personal and corporate accounts including the accounts of hedge funds that he managed.
The final consent judgment against Malnik permanently enjoins him from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder and orders him to pay a civil penalty in the amount of $2,828,699.
In a parallel action, the United States Attorney’s Office for the Southern District of New York brought criminal charges against Malnik, who pleaded guilty to one count of securities fraud and was sentenced to 30 months in prison.
The SEC’s investigation and litigation were conducted by Michael Foster of the Chicago Regional Office, Rua Kelly of the Boston Regional Office, John Rymas of the Market Abuse Unit, and Assunta Vivolo of the Philadelphia Regional Office, with assistance from Darren Boerner of the Market Abuse Unit, James D’Avino of the New York Regional Office, and Carlos Costa-Rodrigues, Marlee Miller, and Matthew Greiner of the Office of International Affairs. This case has been supervised by Joseph G. Sansone, Chief of the Market Abuse Unit. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.