E&Y's Former Manager Settles Insider Trading Charges with the SEC
Yoomi Lee | Bloomberg Law
The Securities and Exchange Commission (SEC) announced that Mark A. Konyndyk, CPA, a manager in the Transaction Advisory Services Group at Ernst & Young LLP (E&Y), settled charges for insider trading in advance of a tender offer.
According to the SEC, Konyndyk performed due diligence work for E&Y’s client Vivendi S.A. (Vivendi), who was involved in confidential merger discussions to acquire Activision, Inc (Activision). Konyndyk allegedly worked 36 hours on this merger transaction, which was assigned a confidential code name “Project Sego.” Despite signing a confidentiality agreement and confirming his understanding and acceptance of E&Y’s insider trading policy, Konyndyk purportedly bought Activision securities on multiple occasions while in possession of material non-public information. Specifically, both before and shortly after his departure from E&Y, Konyndyk allegedly purchased seven call options and 26 out-of-money call options in Activision. Konyndyk sold these options contracts and realized gross profits of $9,725 one day after Activision and Vivendi announced their business combination involving a post-closing tender offer.
The SEC claimed that Konyndyk violated Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder. Without admitting or denying the allegations, Konyndyk agreed to be permanently enjoined from committing future violations of the federal securities laws and to pay $9,725 in disgorgement, $1,789.28 in prejudgment interest, and $9,725 in civil penalties.
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