SEC Charges Joseph C. Lewis and Others with Illegally Tipping Material Nonpublic Information for Unlawful Trading Profits

The Securities and Exchange Commission (SEC) charged investor Joseph C. Lewis for illegally tipping material nonpublic information to his then-girlfriend, Carolyn W. Carter, along with his two private pilots, Patrick J. O’Connor and Bryan L. Waugh. This information was used to conduct trades resulting in a combined profit of more than $545,000. The SEC's complaint alleges that between July and October 2019, Lewis breached a duty of confidentiality by unlawfully sharing information concerning portfolio companies to the individuals he tipped off. As a result, they were able to buy in insider knowledge and benefit from market changes in response to the information being leaked. Carter received a profit of $172,000 after buying over $700,000 worth of a company's stock following a meeting with Lewis. O’Connor and Waugh together reaped profits of more than $373,000 after trading on another portfolio company where Lewis had disclosed information about positive results from a clinical trial. The SEC is seeking permanent injunctive relief and civil penalties from all defendants, as well as disgorgement of ill-gotten gains with prejudgment interest from Carter, O’Connor, and Waugh. Additionally, the U.S. Attorney’s Office has also announced criminal charges against Lewis, O’Connor, and Waugh.