The SEC charged a biopharmaceutical executive and a doctor and patient she tipped about confidential information, along with an Nvidia insider connected to the SAC Capital insider trading case.
In addition, the agency charged a former stock promoter with fraud and issued a stop order against a company that sought to issue stock under an amended registration statement containing false and misleading information.
Stock Promoter Touting Phony Background Charged
A former Florida-based stock promoter currently serving a two-year prison sentence for lying to SEC investigators was charged by the agency with fraud.
Robert Vitale, according to the agency, defrauded investors in a Florida real estate venture, sold unregistered securities and acted as an unregistered broker-dealer. He and his firm Realty Acquisitions & Trust Inc. raised at least $8.7 million from investors, including many senior citizens, and racked up a litany of lies while doing so.
Vitale allegedly told investors their funds were “100% protected” when they were not. He also claimed to be a financial expert with a business degree from Notre Dame when he never attended college after graduating from Notre Dame High School in West Haven, Conn.
While claiming “great honesty and integrity,” Vitale never mentioned to his investors that he had been charged by the SEC in 2004 for a pump-and-dump scheme, settled the charges and agreed to be barred from the brokerage industry.
Vitale is an inmate at the Federal Detention Center in Miami. In September 2013, he was sentenced after being convicted of obstruction of justice and providing false testimony in the SEC’s investigation that led to the current batch of charges.
The SEC seeks the return of allegedly ill-gotten gains with interest, a monetary penalty, and a permanent injunction against Vitale. The complaint also charges Coral Springs Investment Group Inc. as a relief defendant, alleging the company holds assets that came from defrauded investors that should be returned.
Biopharm Exec, Doctor and Patient Settle Insider Trading Charges
A former biopharmaceutical executive and two others have settled SEC charges that they traded on confidential information about the company’s key developmental drug.
According to the agency, Dr. Loretta Itri, president of pharmaceutical development and chief medical officer of Genta Inc., tipped her longtime friend, Dr. Neil Moskowitz, an emergency room physician, about clinical trial results for an experimental drug designed to treat advanced melanoma. Itri had been directly involved in the drug trials and was among the first to learn the results before the public announcement on Oct. 29, 2009. When the results were announced, the company’s stock price dropped 70% — but not before Moskowitz and a friend and patient with whom he shared the information, Mathew Cashin, sold their shares based on the information Itri had provided to Moskowitz. The sale — Moskowitz sold his shares minutes after he spoke with Itri — brought the two illegal gains of $139,000.
Without admitting or denying the charges, the three have agreed to settle with the SEC. The settlement, subject to court approval, requires Itri to pay a civil penalty of approximately $64,000 and bars her from serving as an officer or director of a public company for five years. Moskowitz would be required to return $64,300 of allegedly ill-gotten gains, plus prejudgment interest of $9,556, and pay a civil penalty of $64,300. Cashin would be required to return $75,140, plus prejudgment interest of $10,955, and pay a civil penalty of $37,570, which reflects the cooperation Cashin provided to the SEC’s investigation.