Insider Trading, A Constant SEC Focus

Insider trading is a long standing focus of SEC enforcement as we have discussed a number of times. That focus has generated hundreds of thousands of cases over the years. Some of those cases have generated huge headlines; others have been smaller and received scant publicity. Regardless of size or value — $1.00 or millions — the Commission developed the case, filed it and litigated it to conclusion if it does not settle.

Despite this constant stream of cases however, many believe that they will somehow grab the profits and escape. Perhaps; but the risk is huge with a minimum of civil penalties and the destroyed credit an SEC injunction creates possibly backed by prison time. The Commission’s latest warning to the public is SEC v. Nanini, Civil Action No. 1:24 cv- 213531 (S,D, Fla. Filed Sept. 13, 2024).

Named as defendants are: Federico Nannini, an employee of the Consulting Firm from July 2021 to January 2023; Mauro Nannini, Frederico’s father; Alejandro Thermiotis, a high school friend of Federico Nannini; and Francisco Tonarely, a close friend of Mr. Thermiotis.

Fredrico Nannini was an associate of the Consulting Firm in Miami, Florida. That firm was retained by MacTech, Inc. to conduct buy-side due diligence. The work was being done in connection with the firm’s proposed acquisition of Infrastructure and Energy Alternatives Inc. or IEA prior to the projected public announcement of the deal on July 25, 2022.

Prior to the deal announcement, and after obtaining inside information about the deal, Defendant Fredrico Nannini purchased shares of IEA. He also shared text messages about the deal with Mauro Nannini and Defendant Thermiotis who in turn shared them with Defendant Tonarely. Each man traded prior to the deal announcement.

Following the deal announcement the share price of IEA securities increased over 31%. Each Defendant sold his stares. Collectively, Defendants had trading profits of about $1.1 million. The complaint alleges violations of Exchange Act Sections 10(b) and Rule 10(b) – 5 thereunder. See Lit. Rel. N. 26108 (Sept. 16, 2024).