September 22, 2020

SEC accuses Corporate Lawyer of Insider Trading

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Securities-and-Exchange-Commission-SECBy Patience Haggin, From The Recorder

SAN FRANCISCO — A Newport Beach attorney has settled charges of insider trading with the Securities and , the agency announced Monday. , a former shareholder at Stradling Yocca Carlson & Rauth, is charged with insider trading based on privileged knowledge he obtained while serving as counsel to a publicly traded pharmaceutical firm.

Grewal acted as “primary outside counsel” for on matters of corporate and securities law throughout 2013, according to the complaint. After the company informed him that sales of its top-selling drug were expected to drop, Grewal sold off his Spectrum shares and tipped his wife, who also sold her shares before the information was publicly disclosed. Together, the couple avoided losses of about $45,000, according to the .

Grewal has been suspended from practicing before the SEC and he and his wife agreed to pay $90,000 to settle the charges, according to an SEC press release.

Grewal did not admit wrongdoing in the settlement. His attorney, Irell & Manella partner David Siegel, declined to comment.

According to the SEC complaint, on March 5, 2013 Spectrum’s senior management told Grewal the company expected a significant drop in revenue, as orders for the colorectal cancer drug Fusilev had unexpectedly dropped. The company’s management sought Grewal’s advice on disclosing the news.

On March 7—before Spectrum had publicly disclosed the information—Grewal sold all his 8,000 shares of Spectrum stock, according to the agency’s filing. His wife, Preetinder, sold her all her 3,500 shares on March 11.

The next day Spectrum announced that it expected sales of Fusilev to drop by more than half in 2013, and that company revenue was expected to fall by about 35 percent as a result. The company’s stock price dropped by 37 percent by the market’s close on March 13.

Grewal is no longer with Stradling Yocca Carlson & Rauth, the firm confirmed. His LinkedIn profile indicates that he left the firm in September and has since founded an investment fund called Auctus Global Capital Group. He did not immediately respond to a request for comment relayed through Stradling Yocca on Monday afternoon.

IMAGE: U.S. Securities and Exchange Commission building. Diego M. Radzinschi / The National Law Journal

For more on this story go to: http://www.therecorder.com/id=1202713204379/SEC-Accuses-Corporate-Lawyer-of-Insider-Trading#ixzz3MiyzNdBD

 

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