A Nevada man has settled charged with the SEC that he took inside information while a guest at a longtime friend's home and used it to generate $250,000 in illegal profits, the agency announced.
Brian Fettner, 51, of Henderson, Nev., "surreptiously viewed documents contemplating an acquisition of G&K Services Inc. by Cintas [Corp.]" while changing his golf shoes in the den of a longtime friend who was also the general counsel of Cintas, the SEC said in its complaint.
Without telling his friend, whom he attended middle school and high school with as a child, Fettner then started purchasing G&K Services stock that very same day on his mobile phone, as he played golf with his friend, the SEC said. He continued buying G&K stocks in the brokerage accounts of his ex-wife and a former girlfriend, and persuaded his father and another girlfriend to purchase G&K shares, the SEC said.
"After Cintas and G&K announced the merger on Aug. 16, 2016, G&K’s stock price jumped more than 17 percent, resulting in illicit profits from Fettner’s misconduct of more than $250,000," the complaint said.
G&K, based in Minnetonka, Minn., provides branded identity uniforms and facility products and services for rent and purchase, while Cintas, based in Cincinnati, provides businesses with such products and services as uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, according to the SEC.
The SEC’s complaint was filed in U.S. District Court for the Southern District of Florida. Without admitting or denying the allegations in the complaint, Fettner has consented to the entry of a final judgment permanently enjoining him from violating the charged provisions of the federal securities laws and imposing a penalty of $252,995, the SEC said.
The SEC also named as relief defendants Fettner’s ex-wife and a former girlfriend, who each profited when Fettner used their brokerage accounts to place illicit trades, the SEC said. The relief defendants consented to the entry of a final judgment agreeing to disgorge those profits with prejudgment interest. The settlement is subject to court approval.