The Securities and Exchange Commission today announced settled insider trading charges against Bay Area finance employee Mounir N. Gad and his friend Nathan E. Guido. 

According to the SEC’s orders against Gad and Guido, Gad worked for a Northern California-based bank in its group that assisted private equity firms in financing acquisitions of companies.  On three occasions in 2015 and 2016, Gad tipped Guido, his friend of several years, using material, nonpublic information about upcoming acquisitions (two of which involved tender offers), which Gad learned about in the course of his employment.  Gad used an encrypted messaging platform and code words to provide the tips to Guido.  According to the orders, Guido bought stock in the target companies based on those tips and sold the stock after the acquisitions were announced, resulting in illegal gains of $51,700.  Guido shared about $11,000 of these gains with Gad by giving him cash. 

“Gad had an obligation to keep his firm’s client deal information confidential,” said Erin E. Schneider, Director of the SEC’s San Francisco Regional Office.  “He betrayed that trust by allegedly sharing information with Guido who used it unfairly to profit from market-moving news.”    

The SEC’s orders find that Gad and Guido violated the antifraud and tender-offer provisions of the Securities Exchange Act of 1934.  Both consented to the entry of a cease-and-desist order.  Gad agreed to pay a civil penalty of $51,700 and Guido to pay a civil penalty of $40,700.  The Commission’s order against Guido notes the cooperation he provided to the Commission’s staff.

The U.S. Attorney’s Office for the Northern District of California today announced criminal charges against Gad, and further announced that it has entered into a Deferred Prosecution Agreement with Guido.

The SEC’s investigation was conducted by Robert J. Durham Jr. and supervised by Jeremy E. Pendrey and Monique C. Winkler of the San Francisco Regional Office.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority, the U.S. Attorney’s Office for the Northern District of California, and the Federal Bureau of Investigation.