SEC Obtains Judgment Against Roland M. Mathys – Insider Trading Case

(STL.News) On December 2, 2020, the U.S. District Court for the Southern District of New York entered a default judgment against Roland M. Mathys for insider trading in the securities of Bioverativ, Inc.

The SEC‘s complaint against Mathys, filed on June 13, 2019, alleged that Mathys received material non-public information about an impending acquisition of Bioverativ and, on the basis of that information, purchased out-of-the-money Bioverativ call options in the days immediately leading up to the public announcement.  The complaint alleged that Mathys’s purchases made up a significant portion of all reported options trades in the series of Bioverativ options he traded, including almost 100 percent of the market in several instances.  According to the complaint, Mathys made approximately $5 million from his illicit trading.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York criminally indicted Mathys, and also obtained an order civilly forfeiting the proceeds of Mathys’s illegal trading.

Mathys did not answer or otherwise respond to the SEC’s complaint. In its order entering a default judgment, the court permanently enjoined Mathys from violating the antifraud provisions of Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder.  The court also ordered Mathys to pay a civil penalty of $9,889,369, which represents double Mathys’s illegal trading profits.

The SEC’s investigation was conducted by Michael Hoke and Kimberly Frederick of the Denver Regional Office, and supervised by Jason Burt and Kurt Gottschall.  The litigation was led by Mark Williams and Nicholas Heinke, and supervised by Gregory Kasper.