With SEC v. Cutillo et al., an insider trading civil law case, now in the books, the government concludes its legal actions against one former trader with broker-dealer Lighthouse Financial Group.  Co-defendant Michael Kimelman, who previously was found guilty in a related criminal case, agreed to settle the Commission's insider trading charges, terms of which Federal Judge Richard Sullivan in Manhattan approved. In its complaint, the SEC alleged that Arthur Cutillo, formerly with the law firm Ropes & Gray LLP, misappropriated from his law firm material nonpublic information concerning, among other things, the potential acquisition of 3Com, and tipped the inside information, through another attorney, to Zvi Goffer, in exchange for kickbacks.  Goffer then is alleged to have tipped that information to several individuals, including Kimelman, who traded based on the information and realized $270,000 in illicit profits.  The announced acquisition of 3Com Corp. took place in September 2007. SEC Sanctions. Under his settlement with the SEC, Kimelman is barred from the securities industry and ordered to pay $328,000 in disgorgement and prejudgment interest. Kimelman previously was found guilty of securities fraud and conspiracy to commit securities fraud in a related criminal case, U.S. v. Michael Kimelman, 10-CR-0056 (S.D.N.Y.).  In that case, he was sentenced to a 30 month prison sentence and ordered to pay a criminal forfeiture of $289,000. All told, Kimelman's transgressions cost him big: up to 30 months in jail, $617,000 in fines and disgorgement, and a bar from the industry.

[C-I Note: That's a big hit.  Then again, he's a big boy, who knows what he did was wrong.]

For further details:  [SEC Litigation Rel. 22299, 3/20/12] and [Admin. Proceedings '34 Act Rel. 66626, 3/20/12].