The U.S. Securities and Exchange Commission (SEC) obtained a final consent judgment against Robert Del Prete, a 38-year-old resident of Brick, New Jersey and former SPAC accounting consultant, for insider trading in the stock of HighCape Capital Acquisition Corp.
The SEC Complaint, filed in the U.S. District Court for the District of New Jersey, charges Del Prete with violating Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder.
The complaint alleges that Del Prete was an accounting consultant to HighCape, a special purpose acquisition company, incorporated in Delaware and headquartered in New York, New York, for the purpose of effecting a merger or other business combination with one or more operating companies. The consulting agreement listed the services Del Prete was required to provide, including assisting with the maintenance of general ledgers, calculation of annual performance returns, auditing and tax preparation processes, and preparation of quarterly and annual financial reports, among other things. In addition to performing internal accounting functions, Del Prete served as a point of contact for communications with HighCape’s outside auditor and worked with HighCape’s Form 10-K consultant to prepare financial statements and the Form 10-K filing for HighCape.
The SEC further alleged that Del Prete was present at HighCape’s board meeting when the planned merger with Quantum-Si Incorporated was discussed. He had agreed to keep HighCape’s proprietary information confidential but bought shares of HighCape less than an hour after attending the board meeting. Within hours of HighCape’s press release announcing the deal, Del Prete liquidated his position, realizing an approximate one-hundred percent profit of $60,170 from his purported illegal insider trading.
After the merger, HighCape received a regulatory request seeking information to identify persons who knew of the planned business combination between HighCape and QSI, and the date of such knowledge – in other words, who knew what and when. When questioned about his trades, Del Prete falsely reported to HighCape’s Chief Financial Officer (“CFO”) that he was not aware of the planned merger before the press release, although the two had been working on various aspects of the deal.
The final judgment enjoins Del Prete from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, bars him from acting as an officer or director of a publicly traded company, and orders him to pay disgorgement in the amount of $60,170, plus prejudgment interest of $7,012, for a total of $67,182, which shall be deemed satisfied by the forfeiture order entered against him in the parallel criminal case, which sentenced Del Prete to one year probation, including three months of home detention with location monitoring, and ordered him to pay a $30,000 fine.
Handling All Types of SEC Insider Trading Investigations
Insider trading lawyer David Chase, Esq. of the Law Firm of David R. Chase, has successfully represented individuals in SEC insider trading investigations around the country for more than 25 years after having served as Senior Counsel in the SEC’s Enforcement Division. If you are under an insider trading investigation, or just received an SEC subpoena and need strategic advice from an experienced SEC defense attorney, contact David at: 800-760-0912 or e-mail him at: david@davidchaselaw.com. Visit the Firm’s website for valuable content and to review the firm’s prior successful defense results at: www.securitiesfrauddefense.net.
