David R. Chase, P.A.
Call Us Now: 800-760-0912
David R. Chase, P.A.
Call Us Now: 800-760-0912


SEC Files Insider Trading Charges Against Former Employee and Friend for Trading in International Rectifier Corporation Stock

The Securities and Exchange Commission recently filed civil charges against a former employee of International Rectifier Corporation (IRC) and his friend for trading on material, nonpublic information in advance of the company’s acquisition.

​The SEC alleges that Lanny Brown knew that Infineon Technologies AG intended to acquire his then-employer, IRC, before the deal was publicly released.  Brown then tipped his friend, Sean Fox, about the acquisition and each then proceeded to purchase IRC call options, according to the SEC Complaint.

In a more sinister vein, the SEC claims that Brown and Fox attempted to conceal Brown’s involvement in the trading by depositing approximately $12,000 of their combined funds into Fox’s securities brokerage account, and then utilized the account to purchase the call options.  When the pair closed the option positions after the acquisition was made public, they made $369,720 in illegal insider trading profits.  The SEC further claims that in order to hide Brown’s role in the insider trading, Fox funneled Brown’s share of the insider trading profits by paying several of Brown’s personal expenses and by writing checks to Brown’s children and stepchildren. Brown and his wife then endorsed the checks and used the funds for their personal benefit.

The SEC’s complaint, filed in federal court in the District of Arizona, charges Brown and Fox with violating the anti-fraud provisions of the Federal Securities Laws, namely Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. It seeks disgorgement, pre-judgment interest, injunctions and civil monetary penalties.

The federal criminal authorities also filed charges against Brown and Fox in the District of Arizona for the same alleged insider trading conduct.

If you are under investigation by the SEC for insider trading, it is critical that you retain an experienced SEC defense attorney who understands how the SEC investigates, prosecutes and settles its cases.  An SEC defense attorney will protect your rights and strategically navigate you through the often-times stressful investigation with the goal of achieving the best possible result for you.

The Law Firm of David R. Chase, headed by SEC defense attorney David Chase, focuses its securities practice on the representation of those under SEC and FINRA investigations, as well as those who have already been charged by securities regulators.  Call SEC defense attorney, David Chase, for a confidential consultation as to your legal rights and strategic options at 1-800-760-0912.


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