The Securities and Exchange Commission secured entry of a Final Judgment against Robert H. Bray for his alleged insider trading in a bank stock. The final judgment permanently enjoins Bray from future violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and orders him to pay almost $300,000 in disgorgement, which was deemed paid-in-full by the forfeiture order entered against him in a parallel criminal case.
In August 2014, the SEC brought civil insider trading charges against Bray and Patrick O’Neill, an Eastern Bank Corp. Vice President. According to the SEC’s allegations, O’Neill learned that Eastern Bank intended to acquire another, smaller bank and tipped Bray, a friend of his with whom he played golf at a local country club (the tip is reported to have been delivered on a cocktail napkin at the country club). The SEC further claimed that Bray sold shares in other stocks he owned to raise cash to purchase shares in the takeover bank target. When the acquisition was publicly announced, the bank stock almost doubled and Bray reaped nearly $300,000 in illegal profits from his stock sales over the next few months.
Both Bray and O’Neill faced criminal charges for their insider trading. O’Neill pled guilty and settled the parallel SEC charges. Bray chose to fight and went to trial — a jury found him guilty of insider trading and he was sentenced to two years incarceration, ordered to forfeit his insider trading profits and to pay a $1 million criminal fine. On appeal, the First Circuit Court of Appeals affirmed the guilty verdict against Bray. Bray then flew the coup and fled to Puerto Rico, where he was arrested in August 2017. He is now safe and sound as a guest of the Federal Bureau of Prisons.
Bray, almost 80 years old, likely would have been better off having simultaneously resolved both the SEC and criminal actions and avoiding trial, particularly given that the tipper of the material, non-public information, O’Neill, would presumably be testifying against him. With a simultaneous resolution, Bray would have avoided the $1 million criminal fine and would have likely received a sentence significantly less than 2 years (O’Neill, who pled guilty, was sentenced to 1 year of probation). Given Bray’s advanced age, every day counts.
David Chase is a SEC defense attorney and former SEC Prosecutor who represents and defends those around the world who are being investigated or prosecuted for insider trading in SEC investigations or insider trading criminal cases. Mr. Chase is the principal of the Law Firm of David R. Chase, a SEC law firm, located in Fort Lauderdale, Florida. For a confidential consultation, you may contact Mr. Chase at: firstname.lastname@example.org or toll-free at: (800) 760-0912. The law firm’s website is: securitiesfrauddefense.net.