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Regulatory Sanctions

SEC Accountant Caught Trading Options

May 24, 2017

David Humphrey, a long-time accountant with the SEC agreed to pay $109,000 in disgorgement, prejudgment interest and fines to settle charges in connection with his trading of options and other securities. In a parallel action, Humphrey entered a guilty plea to criminal charges filed by the Justice Department.


According to the SEC Complaint, … Humphrey, who worked at the SEC from 1998 to 2014, concealed his personal trading from the SEC’s ethics office and later misrepresented his trading activities to the SEC’s Office of Inspector General when questioned during an investigation.


He had violated the rules by engaging in transactions involving derivatives, failing to obtain pre-clearance before trading non-prohibited securities, and failing to hold securities for the required period. Among other things, SEC employees are banned from holding stock in companies directly regulated by the SEC – e.g., banks - and trading in options is banned.


Humphrey was not accused of using material non-public information for his trades, and the SEC noted that he often suffered "significant losses."