Complaint Against Ronald Smith. Document Filed by United States Securities and Exchange Commission..(Sweet, Kara)
1This action concerns Smith’s insider trading in the securities of two issuers based on material nonpublic information Smith received from his close friend and colleague, Jordan Meadow (“Meadow”), who was in possession of material nonpublic information received from his friends, Steven Teixeira (“Teixeira”) and Individual 1.1
2Smith and Meadow were at all relevant times registered representatives at a New York-based registered broker dealer (the “Brokerage Firm”).
3Teixeira lived and had a romantic relationship with an executive assistant (the “Executive Assistant”) who worked at a New York-based investment bank (the “Investment Bank”) during the relevant period. 1 On June 29, 2023, the Commission filed an action against Meadow and Teixeira for their roles in the insider trading scheme, SEC v. Meadow, et. al., Case No. 23-cv-05573 (S.D.N.Y.), which is presently stayed pending the resolution of the parallel criminal proceeding against Meadow, United States v. Meadow, 23-cr-313 (S.D.N.Y.).
4Because of her role at the Investment Bank, the Executive Assistant had access to material nonpublic information relating to mergers and acquisitions involving the Investment Bank’s clients. The Executive Assistant had access to this information on her laptop computer, which she left unattended in the apartment she shared with Teixeira.
5From in or about late 2020 through in or about May 2022, Teixeira misappropriated material nonpublic information from the Executive Assistant’s laptop.
6The material nonpublic information related to the securities of Domtar Corporation (“Domtar”), CDK Global, Inc. (“CDK”), Score Media and Gaming, Inc. (“Score”) and VMWare, Inc. (“VMWare”), among others.
7Teixeira shared the material nonpublic information that he misappropriated concerning Domtar and CDK with Individual 1 and Meadow, among others. Teixeira also shared the material nonpublic information that he misappropriated concerning Score and VMWare with Individual 1, who then shared it with Meadow.
8Meadow traded securities based on the material nonpublic information that he obtained from Teixeira and Individual 1 and shared the information, including that the information had been misappropriated, with his friend and co-worker, Smith.
9Smith profitably traded securities of Score and VMWare based on the material nonpublic information that he received from Meadow and knew that the information had been obtained in breach of a duty or misappropriated.
10Meadow and Smith also used the misappropriated information to recommend profitable trades to their shared customers at the Brokerage Firm, for which they received commissions.
11Smith also had access to the brokerage account of his then girlfriend and now wife, Individual 2, and caused trades to be placed in that account with the material nonpublic information.
12In exchange for the material nonpublic information, Meadow offered to compensate Teixeira and Individual 1, including discussing providing them with Rolex watches. Meadow and Smith discussed compensating Teixeira and Individual 1 in exchange for material nonpublic information.
13Smith’s illicit profits from trading based on the information he received from Meadow totaled more than $530,000 in his own account and more than $25,000 in Individual 2’s account.
14Together, customers of Meadow and Smith made millions of dollars on timely trades in the securities of Score, while Meadow and Smith also made hundreds of thousands more in commissions.
VIOLATIONS
15Defendant violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] by engaging in the conduct this Complaint describes.
16Defendant will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object, unless he is restrained and enjoined.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
17The Commission brings this action pursuant to Exchange Act Sections 21(d) [15 U.S.C. § 78u(d)], 21(e) [15 U.S.C. § 78u(e)] and 21A(a) [15 U.S.C. § 78u-1(a)].
18The Commission seeks a final judgment (a) permanently enjoining and restraining Smith from violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; (b) permanently enjoining and restraining Smith from, directly or indirectly, acting as or being associated with any broker, dealer, or investment adviser pursuant to Section 21(d)(1) and (d)(5) of the Exchange Act [15 U.S.C. §§ 78u(d)(1) and (5)]; (c) ordering Smith to disgorge ill-gotten gains he received as a result of the violations this Complaint alleges, and to pay prejudgment interest pursuant to Exchange Act Sections 21(d)(3), (5) and (7) [15 U.S.C. §§ 78u(d)(3), (5) and (7)]; (d) ordering Smith to pay civil penalties pursuant to Exchange Act Section 21A [15 U.S.C. § 78u-l]; and (e) ordering any other and further relief the Court may deem just and proper.
JURISDICTION AND VENUE
19This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), (e) and 78aa].
20Venue in this District is proper pursuant to Section 27 of the Exchange Act [15 U.S.C. § 78aa]. During the relevant time period, Smith worked at the New York office of the Brokerage Firm, which is located in this District. Defendant also may be found or transacts business in the Southern District of New York, and certain of the acts, practices, and courses of business constituting the violations of the federal securities laws alleged herein occurred within the Southern District of New York.
DEFENDANT
21Ronald Smith, age 37, lives in Stamford, Connecticut. He served as a registered representative of the Brokerage Firm since in or about July 2013 through December 2023.
OTHER RELEVANT INDIVIDUALS AND ENTITIES
22Jordan Meadow served as a registered representative of the Brokerage Firm from in or about 2018 through June 2023.
23Steven Teixeira was, at relevant times, employed by an international payment processing company as its Chief Compliance Officer and was a certified anti-money laundering specialist.
24Executive Assistant was, at relevant times, employed by the Investment Bank as an executive assistant. At the Investment Bank, the Executive Assistant was responsible for, among other things, scheduling meetings of the Investment Bank’s valuation and fairness committees concerning potential transactions involving the Investment Bank’s clients. The Executive Assistant had access to material nonpublic information relating to dozens of the Investment Bank’s deals.
25Individual 1 was at relevant times a friend of Teixeira and Meadow.
26Individual 2 was at relevant times the romantic partner and now wife of Smith. Smith had access to Individual 2’s brokerage account.
27Investment Bank is a U.S.-based investment bank and financial services company headquartered in New York, within the Southern District of New York.
28Brokerage Firm is a U.S.-based brokerage firm with offices in New York, within the Southern District of New York.
COMMONLY USED TRADING TERMS
29A stock option, commonly referred to as an “option,” gives its purchaser-holder the option to buy or sell shares of an underlying stock at a specified price (the “strike” price)
Read the full filing
You’re reading pages 1–5 of 19. Register free to read the complete 19-page transcript on this page.
Register free to continue reading →
These are public U.S. federal court records, available free from PACER and the court. Registration unlocks our full on-page transcript — a convenience service.
advertisement
Public U.S. federal court record (district court docket 73111987, document 1). Source via the RECAP Archive (Free Law Project). The same record is available from PACER. Informational only — not legal advice.