SEC Settles Insider Trading Charges With Silicon Valley Executive

Investing

Published: May 3, 2016 2:51 pm

Last Updated: January 13, 2020 9:55 am

The U.S. Securities and Exchange Commission (SEC) announced that a Silicon Valley executive has agreed to pay more than a half-million dollars to settle charges that he traded on inside information received from a board member at a Minnesota-based company that was trying to solicit a competing bid in advance of a merger.

The agency alleged that Peter D. Nunan was contacted by the board member at FSI International and confidentially informed that a Japan-based semiconductor equipment company called Tokyo Electron Ltd. was negotiating to acquire FSI. This board member knew that Nunan, a senior engineering executive at a subsidiary of a semiconductor equipment manufacturer named Screen Holdings Company, had connections with the executive responsible for evaluating potential corporate acquisitions at Screen Holdings.

According to the complaint, Nunan misused the confidential information entrusted to him about FSI’s potential merger plans and bought 105,000 FSI shares during the next six months. He also recommended the trade to his brother, who purchased 1,000 shares of FSI stock.

Once Tokyo Electron and FSI publicly announced a merger agreement on Aug. 13, 2012, Nunan sold most of his FSI stock the next day and the illicit profits from his unlawful trading and tipping totaled $254,858.

Scott W. Friestad, Associate Director of the SEC’s Division of Enforcement, commented:

Corporate insiders must act with the highest degree of ethics and integrity, and it is simply unacceptable when they abuse their access to sensitive information in an attempt to line their own pockets.