U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23223 / March 27, 2015
Securities and Exchange Commission v. Michael Anthony Dupre Lucarelli, Civil Action No. 14-civ-6933
On March 23, 2015, on a motion by the Securities and Exchange Commission, the court dismissed without prejudice the SEC's claims against Lucarelli for disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty. Previously, on October 26, 2014, on a motion by the SEC and with Lucarelli's consent, the court entered a judgment permanently restraining and enjoining Lucarelli from violations of Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, Section 17(a) of the Securities Act of 1933 (the "Securities Act"), and Section 14(e) of the Exchange Act.
The SEC's Complaint against Lucarelli, filed on August 26, 2014 in federal district court in Manhattan, alleged that Lucarelli, a director of market intelligence at an investor relations firm, traded in securities belonging to companies that his firm was advising in advance of announcing their earnings or other significant events such as a merger or clinical drug trial result. Lucarelli began taking a position in a client's securities in the days immediately preceding the announcement, although in a few instances he began making his purchases weeks in advance. Lucarelli started divesting himself of his position immediately after the announcement in order to reap instant profits. (See Litigation Rel. No. 23074)
In a parallel proceeding, on September 25, 2014, Lucarelli pleaded guilty to one count of securities fraud in violation of Section 10(b) of the Exchange Act, and consented to an order of forfeiture of $955,521.62. On January 21, 2015, Lucarelli was sentenced to 30 months in prison followed by three years of supervised release, and the forfeiture order against him became final.