Douglas Roth, Insider Trading, New York 2023

A former top executive at a Long Island pharmaceutical company has pleaded guilty to insider trading, a crime that could land him in prison for up to 20 years and cost him millions of dollars in fines.

Douglas Roth, 63, the former Chief Financial Officer (CFO) of Aceto Corporation, a pharmaceutical company based in Port Washington, New York, admitted in federal court in Central Islip to selling shares of the company’s stock after learning that the company’s financial condition had worsened.

Roth used the non-public information to sell approximately 69,549 shares of Aceto stock between January and March 2018, avoiding more than $145,000 in losses when the company’s share price dropped after a public announcement detailing the negative information.

As CFO of Aceto from approximately May 2001 to March 31, 2018, Roth was aware of the non-public information, which included that Aceto was likely to breach certain financial covenants it owed to its bank lenders, and that Aceto might need to write down more than $100 million in goodwill assets.

The guilty plea was announced by Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

“Corporate officers cannot use their positions of trust for personal benefit at the expense of shareholders,” DuCharme stated. “As demonstrated by today’s guilty plea, this Office will vigorously prosecute those who abuse their positions to defraud the financial markets.”

Roth is scheduled to be sentenced and faces up to 20 years in prison, as well as forfeiture and a fine of up to $5 million.

The case is being handled by the Office’s Business and Securities Fraud Section, with Assistant United States Attorneys Alixandra E. Smith and Mathew S. Miller in charge of the prosecution.

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