In a shocking turn of events, a former accounting manager of a Pasadena-based storage business has agreed to plead guilty to insider trading, resulting in profits of nearly $500,000. The individual, known as Marco Antonio Perez, allegedly bought over 66,000 shares of the company based on non-public information that the company was about to be acquired at a higher per-share price. After the news of the acquisition became public, Perez sold the shares, resulting in substantial gains. This fraudulent activity highlights the risks and legal consequences associated with insider trading and serves as a reminder of the importance of maintaining ethical practices in the world of finance.
Former Accounting Manager Pleads Guilty to Insider Trading and Profits of Nearly $500,000
In a recent case of insider trading, Marco Antonio Perez, a former accounting manager at a Pasadena-based storage business, has agreed to plead guilty to charges of illegally buying company shares based on non-public information. This resulted in profits of nearly $500,000. The case has been brought forth by the Department of Justice, and Perez is now facing severe legal consequences for his actions.
Charges and Potential Sentence
Perez has been charged with one count of insider trading, which is considered a felony. If convicted, he could face a maximum sentence of 20 years in federal prison. The severity of the sentence reflects the seriousness of the crime and serves as a deterrent to others who may consider engaging in insider trading. Perez’s plea agreement has been filed in the United States District Court, and he is scheduled to appear in court on October 5 for his initial hearing.
Background of the Defendant
Marco Antonio Perez, also known as Marc Perez, is a 59-year-old resident of Glendora, California. Prior to this incident, Perez worked as an accounting manager at General Finance Corp., a publicly traded storage and modular space company based in Pasadena. It is important to note that Perez’s criminal history, if any, may have an impact on the sentencing decision.
Description of the Company
General Finance Corp., the company involved in this case, is headquartered in Pasadena, California. It is a publicly traded company, which means that its shares are available for purchase and sale on the stock market. General Finance Corp. operates in the storage and modular space industry, providing storage solutions to individuals and businesses. The company’s financial performance is influenced by various factors, including market conditions and competition within the industry.
Role of the Defendant in the Company
As the accounting manager at General Finance Corp., Perez held a significant position within the company. He reported directly to the chief financial officer and also took on assignments from the company’s chairman, including the responsibility of printing out the chairman’s emails. This role gave Perez access to confidential and material information belonging to the company, including potential offers to buy the company. Furthermore, Perez had supervisory responsibilities and worked closely with key personnel within the company.
Access to Material Information
Perez had access to confidential emails sent to the company’s chairman, which contained material information about the pending sale of General Finance Corp. This information had not been made public at the time when Perez made the decision to buy company shares. It is important to recognize that this access to non-public information placed Perez in a position of trust, and he had a duty to protect sensitive data belonging to the company.
Violation of Fiduciary Duties
As an employee of General Finance Corp., Perez had fiduciary duties to the company and its shareholders. Fiduciary duties include acting in the best interest of the company, avoiding conflicts of interest, and upholding ethical standards. Perez’s actions of engaging in insider trading and profiting from confidential information were a clear violation of his fiduciary duties. Moreover, the company had policies in place that explicitly prohibited insider trading, further emphasizing the seriousness of Perez’s breach.
Timeline of Insider Trading
Perez engaged in insider trading in March and April of 2021. During this period, he purchased a total of 66,585 shares of General Finance Corp. stock based on non-public information. The information he relied upon was contained in confidential emails sent to the company’s chairman, which indicated that the company was about to be acquired at a higher per-share price. Perez purchased these shares at prices ranging from $10 to $12 per share. After the acquisition of General Finance Corp. by United Rentals Inc. was publicly announced on April 15, 2021, the share price increased from $12.17 to $19 per share. Taking advantage of this surge in price, Perez sold all the shares he had purchased, generating a profit of approximately $488,533.
Sale of General Finance to United Rentals
General Finance Corp. was ultimately sold to United Rentals Inc., a company based in Stamford, Connecticut. The acquisition was announced on April 15, 2021, when United Rentals issued a press release stating that it was acquiring General Finance Corp. for $19 per share. This acquisition news caused a significant increase in General Finance Corp.’s share price.
Profit Made by the Defendant
Through his illegal insider trading activities, Perez was able to profit significantly. After selling all the shares he had purchased based on non-public information, Perez made a profit of approximately $488,533. This amount represents the financial gain he achieved through his illicit activities.
Tip-offs to Other Individuals
In addition to engaging in insider trading himself, Perez also shared the non-public information regarding the pending sale of General Finance Corp. with two other individuals. This action violated General Finance Corp.’s policy against insider trading and resulted in those individuals making profits of $127,140 and $34,867, respectively. The involvement of these individuals further highlights the negative consequences and potential spread of insider trading within the company.
SEC Civil Charges
In addition to the criminal charges filed by the Department of Justice, Perez is also facing civil charges brought by the United States Securities and Exchange Commission (SEC). These charges are related to Perez’s illegal activities and serve to enforce regulations and protect the integrity of the stock market. The SEC plays a critical role in investigating and prosecuting individuals who engage in insider trading.
Investigation and Prosecution
The investigation into Perez’s insider trading activities was conducted by the Federal Bureau of Investigation (FBI). The FBI worked diligently to gather evidence and build a strong case against Perez. The case is being prosecuted by Assistant United States Attorneys Ranee A. Katzenstein and Steven M. Arkow of the Major Frauds Section. Their expertise in handling complex financial crimes is essential in ensuring a fair and thorough legal process.
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In conclusion, the case against Marco Antonio Perez highlights the severe legal consequences associated with insider trading. Perez’s actions not only violated his fiduciary duties but also undermined the integrity of the stock market. The investigation and prosecution of this case serve as a reminder that insider trading will be vigorously investigated and prosecuted to deter others from engaging in similar illegal activities.