James Cope, 67, of Murfreesboro, Tenn., has pleaded guilty to insider trading after exploiting confidential information to profit from Pinnacle Financial Partners Inc.’s 2016 acquisition of Avenue Financial Holdings Inc. The former lead director and Rutherford County Attorney used his position on Pinnacle’s board to buy thousands of shares of Avenue stock before the deal was public, netting him illegal gains on nonpublic knowledge.
Cope, a licensed attorney with over two decades of experience as a bank director, was deeply embedded in Pinnacle’s leadership. He served as Chair of the Compensation Committee and previously as Lead Director. Despite Pinnacle’s strict insider trading policy—which explicitly forbids using material nonpublic information to trade securities—Cope violated his fiduciary duty and federal law for personal profit.
In December 2015, Pinnacle executives initiated talks to acquire Avenue. On December 1, Cope and the Executive Committee were informed by Pinnacle’s CEO of outreach to Avenue executives about a potential merger. By late December, Cope received confidential briefing materials referencing a proposed $19.00 per share acquisition price for an unnamed bank—information not available to the public.
On January 5, 2016, Cope attended an Executive Committee meeting where Pinnacle executives confirmed the target was Avenue and reviewed financial details, including the $19.00 per share offer. All members, including Cope, voiced support for the acquisition. Hours later, Cope purchased 6,179 shares of Avenue stock at approximately $13.81 per share. Six days later, on January 11, he bought another 4,000 shares.
On January 29, 2016, Pinnacle publicly announced the acquisition agreement. Avenue’s stock price surged. Cope’s trades, based entirely on inside knowledge, resulted in substantial illicit profits. His actions undermined market integrity and betrayed the trust placed in corporate directors to uphold ethical and legal standards.
Acting U.S. Attorney Jack Smith condemned the betrayal: “Mr. Cope abused his position of trust as a member of Pinnacle’s board of directors to make a quick profit. His actions undermine the investing public’s confidence in our securities markets.” FBI Special Agent in Charge Michael T. Gavin added that the plea reflects a broader crackdown on financial corruption: “The FBI will continue to work to detect, disrupt and dismantle these types of schemes.” In a parallel action, the SEC has filed civil charges against Cope.
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Key Facts
- State: Tennessee
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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