Turns out the U.S. Securities and Exchange Commission takes a hard line on insider trading, which one AuthenTec employee learned the hard way after the company was purchased by Apple. John Stimpson bought AuthenTec options after learning Apple was planning to buy the company, then sold it for a tidy profit after the deal was completed.
Stimpson, who was a senior network administrator at AuthenTech, heard about the planned purchase ahead of time through a special board meeting and human resources activity. He used that knowledge, according to Fortune, to buy AuthenTec options before the sale became public.
That insider information paid off—at least initially—because those options increased in value substantially before Stimpson sold them. His activity ultimately caught the ever watchful eye of the SEC, and that led to the lawsuit Stimpson just settled.
Stimpson agreed to a $278,773 settlement without admitting any wrongdoing. That includes $135,570 in trading profit, a $135,570 civil fine, and $7,633 in interest.
The big take away here is that insider trading is a really bad idea. The other take away is that Stimpson didn’t follow the advice all Mac Geek Gab listeners know: Don’t get caught.