An analyst for a New York City investment firm has been charged with making $1.5 million by trading on his mother’s brokerage account using insider information he gained at work, the Securities and Exchange Commission announced Thursday.
John Afriyie, through his work at an unnamed investment firm, found out that the home security company ADT Corporation was to be acquired by Apollo Global Management. Using this information, Afriyie made trades in February in his mother’s account before the information was made public, the SEC claims.
Apollo Global Management had approached the Manhattan-based investment firm where Afriyie was employed and discussed potential debt financing for a public-to-private deal. Allegedly, Afriyie afterward accessed several highly confidential, deal-related documents on the firm’s computer network.
The SEC says he purchased thousands of high-risk ADT call options in his mother’s account in anticipation that the company’s stock price would rise when its acquisition was publicly announced. The deal was announced on February 16, and afterwards Afriyie sold all of the ADT options in his mother’s account to obtain his illicit profits, the SEC says.
The U.S. Attorney’s Office for the Southern District of New York has filed criminal charges against Afriyie.
“Insider traders should have learned by now that trying to hide their illegal activity in a relative’s account ultimately won’t work,” says Jina L. Choi, the director of the SEC’s San Francisco Regional Office who has been active in other SEC insider trading investigations.