In order to resolve allegations of insider trading brought by the Securities and Exchange Commission (SEC), a former Ernst & Young business development director agreed to pay $23,900.
When he was employed by the Big Four firm, Michael Weiss had access to the private and sensitive business data of his clients, claims the SEC's complaint, which was submitted on Wednesday to the Southern District of New York's federal court.
Weiss bought shares of the individual firms' equities on four occasions after learning about impending acquisitions, potential business plans, and financial forecasts involving four of his client companies, the SEC said. He is accused of acting inappropriately between July 2014 and September 2015.
According to the agency, Weiss carried out his scheme "for his personal gain and in violation of the duty he owed to both EY and EY client companies."
The SEC observed that as a condition of his employment, Weiss signed yearly affirmations "indicating that he carefully read, understood, and agreed to comply with EY’s global code of conduct and insider trading global policies, among others, as a condition of his employment."
Weiss served as the company's director of business development from August 2003 to January 2021. During that period, according to the SEC, he engaged on more than 50 chases of audit and non-audit business prospects involving current and potential customers of EY.
A worldwide packaging business, a personal finance firm, a global investment bank, and a freight transportation firm were among the four clients Weiss reportedly bought stock in.
Weiss discovered the multinational packaging company's plans to transfer its headquarters in June 2014. According to the SEC, he bought 5,000 shares of the company's stock on July 23, 2014, before the market opened.
Weiss sold all 5,000 of the company's shares on August 18, 2014, for a $3,113 profit. According to the SEC, he failed to inform EY of the deals.
The agency discovered that Weiss generated gains of $10,286 from his illegal stock trading with the four entities. According to the SEC, he broke the Securities Exchange Act's anti-fraud provisions.
According to the SEC, Weiss "knew or was reckless in not knowing" that using insider knowledge obtained as a result of his employment with EY to make trades for his own benefit violated his obligations to the company and its clients.
Weiss is required to make payments totaling $10,286 in restitution, $10,286 in fines, and $3,328 in interest.
An EY official responded via email: "We have no comment further to the complaint and judgment filed (Wednesday).It is worth noting, as the complaint states, we ‘determined defendant violated several EY policies.’ His employment was terminated in 2021."
The SEC stated that a judge must approve the deal.
By fLEXI tEAM