A former Securities and Exchange Commission employee has admitted to participating in prohibited trading activities for well over a decade following an SEC Office of Inspector General investigation.
David Humphrey, of Vail, Arizona, pleaded guilty to devising, executing and concealing an “options trading strategy” under which he traded barred options and other securities over 100 times while employed by the SEC in Washington, D.C., for 16 years.
SEC ethics regulations prohibited Humphrey from trading options where “the underlying interest was a security or group of securities and from purchasing or holding securities in entities the SEC directly regulates, such as financial institutions,” according to a Department of Justice statement on the case.
In addition, within his role as a branch chief in the Division of Corporation Finance, Humphrey had to pre-clear securities transactions, make certifications of compliance for his holdings, and annually disclose held assets with value greater than $1,000 or that produced income beyond $200 on Office of Government Ethics Confidential Financial Disclosure Reports (Form 450).
As part of his plea agreement, Humphrey admitted to repeatedly signing and submitting false Form 450 statements that failed to mention reportable sales and holdings, as well as filing false certifications that he was adhering to all applicable SEC regulations.
Humphrey’s sentencing is set for Aug. 8, 2017.
SEC investigation snares employee in decade-long trading scheme
