Douglas Dalton, 48, of Bentonville, Arkansas, pleaded guilty to securities fraud on Tuesday stemming from an insider trading scheme. Court documents reveal Dalton obtained confidential information regarding an impending acquisition of Company-1, a publicly traded firm based in Idaho, from Michael Smith, the company’s President and COO, with whom he was close friends.
On July 26, 2024, Dalton learned the acquisition price would be approximately $31 per share during a phone call with Smith. Recognizing the information as material and nonpublic, Dalton purchased Company-1 call options for roughly $19,985.30. Following the public announcement of the acquisition on August 7, 2024, Dalton sold those options, realizing a profit of approximately $96,515.44 – a nearly 500% return.
Dalton faces a maximum sentence of 20 years in prison after pleading guilty to one count of securities fraud. His sentencing is scheduled for June 17th. Michael Smith previously pleaded guilty to the same offense in November 2025 and also faces up to 20 years imprisonment.
The investigation was conducted by the Department of Justice and the Securities and Exchange Commission.
Source: Department of Justice
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