Stock Brokerage Agrees to $410,700 Trading Penalty
NEW YORK (AP) _ A stock brokerage has agreed to pay $410,700 to the federal government to settle civil charges of insider trading, the U.S. Securities and Exchange Commission announced Wednesday.
At the same time, the SEC sued a former vice president of the firm, Marcus Schloss & Co. Inc., for allegedly trading stocks in 1985 and 1986 on the basis of inside information obtained by a research analyst in his company.
The analyst, Andrew Solomon, was one of five defendants accused in 1986 of insider trading in the ″Yuppie Five″ case. All pleaded guilty.
The SEC alleged that Marcus Schloss made illegal profits of $136,900. Without admitting or denying wrongdoing, the firm agreed to pay the government that sum plus a penalty of double that sum, the SEC said.
The SEC’s complaint against Marcus Schloss alleged that the stock trades were authorized by Douglas Ronald Yagoda, a vice president. Yagoda was accused in a separate SEC civil complaint of fraudulent stock trading; the suit seeks an unspecified penalty.
Marcus Schloss, in a statement, said Yagoda was withdrawing from the firm to defend himself and said it ″fully supports Mr. Yagoda.″ Its own settlement, the company said, ″reflects Marcus Schloss’ responsibility for Solomon as his employer.″
Yagoda’s lawyer, Stanley Arkin, noted that Yagoda has not been charged with any criminal wrongdoing. ″It is unfortunate that Solomon, because of his own problems, has found it advantageous to falsely suggest that Ron Yagoda had any part of trading on unlawful information - an accusation that the facts will entirely refute,″ Arkin said in a statement.
The SEC noted that Marcus Schloss, in addition to the $410,700 payment, agreed to be censured by the commission and to hire an independent consultant to review its procedures. The agreement must be approved by a judge.