Former AuthenTec Employee Settles Insider Trading Case from Apple Purchase

1 minute read
| News

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.

AuthenTec employee settles lawsuit for insider trading

Former AuthenTec employee settles insider trading lawsuit

Apple bought AuthenTec in July 2012 for US$356 million, causing its stock to shoot up by two thirds. Apple bought the company for its fingerprint sensor and mobile device security technology.

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.

2 Comments Add a comment

  1. brett_x

    No jail time, no criminal record = no lesson learned. And when others see this result, they also take that risk is worth taking.

  2. seamuswarren

    Not sure a gaol term would be appropriate for a non-violent breach.

    Was the offender banned from further trading?

    I wonder if the offender would have been caught if a trusted friend or relative had made the purchase on their behalf. A large amount would have been transferred into this trusted friend’s name, which may still have been flagged.

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