Four men were charged with insider trading, including an Atlanta accountant who allegedly learned of a pending takeover while giving tax advice to a member of the O’Charley’s restaurant chain’s board of directors, according to federal authorities.
The four didn’t admit guilt, but agreed to pay a total of $420,000 — mostly in penalties — to settle charges that they illegally profited from inside information, according to the U.S. Securities and Exchange Commission, whose Atlanta office conducted the investigation.
The SEC said Donald S. Toth, an accountant in Atlanta, learned of Jacksonville-based Fidelity National Financial’s planned acquisition of O’Charley’s about two months ahead of the deal’s announcement. Toth, who is described as a senior partner at Smith Adcock and Co. on that Atlanta firm’s web site, instructed his financial advisor to buy 5,000 shares of O’Charley’s stock an hour after the meeting, the SEC said.
Toth also tipped two other clients, James A. Nash, of Buford, who bought 10,000 shares, and Blair G. Schlossberg, of Holmes Beach, Fla., the agency said. Schlossberg tipped his business partner, Moshe Manoah, of Davie, Fla., and they jointly bought O’Charley’s stock, the SEC said.
Schlosseberg is a former Atlanta attorney at Alston & Bird and BWAY Corp. who now works at three investment and real estate development firms in Florida, according to his Linked -In profile online.
“As an accountant, Toth had a duty to keep confidential the information shared by his client for tax-planning purposes, but instead he misused it for personal investments and provided the details to other clients for their misuse,” said William P. Hicks, associate director of enforcement in the SEC’s Atlanta office.
O’Charley’s stock price rose 42 percent, the SEC said, on the day Fidelity National, a title insurance company that already owned nearly 10 percent of the company, announced its plans in February 2012 to purchase all of the restaurant company’s stock. The four made more than $160,000 in trading profits, the SEC said.
Under their settlement with the SEC, the four gave up all those profits and paid about $260,000 in penalties. Toth agreed to give up $19,036 in trading profits and pay $105,160 in penalties and interest, according to the SEC.
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