SEC Accuses Wells Fargo Analyst of Insider Trading

Yesterday, a former Wells Fargo Bank NA financial analyst allegedly gave improper stock tips to her boyfriend in advance of the near $400 million acquisition of American Dental Partners, Inc. by private equity firm JLL Partners, according to a suit filed by the U.S. Securities and Exchange Commission (SEC).

The SEC told a Massachusetts federal court that former Wells Fargo financial analyst Shirmila Doddi told her boyfriend, Vlad Spivak, about the impending deal a few weeks before it was announced in November 2011, sending ADP’s  stock soaring 79 percent. The SEC alleges the illegal tip earned the boyfriend 222,350. Doddi’s boyfriend allegedly made the illegal trades in his and his mother’s brokerage accounts.

In the complaint, the SEC claimed Doddi often had access to nonpublic information about companies that were clients of the Wells Fargo as well as other nonpublic information including confidential financial projections, as well as information about potential transactions. The complaint went on to say she was aware that she had a duty to the bank to keep such nonpublic information confidential and breached that duty.

The SEC complaint says Doddi and Spivak were together from at least early 2011 to late 2011 and that he told Doddi 
“that insider trading was not a big deal and that individuals rarely get caught.” With one exception, Doddi rejected Spivak’s requests for inside information, telling him “that she was not supposed to discuss such information with him,” the SEC said but she apparently relented and eventually gave him the information on the ADP acquisition with the knowledge that information was to be used to purchase American Dental stock.

The SEC complaint claims the two individuals violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

The experienced securities litigation attorneys at Colling Gilbert Wright have litigated and resolved hundreds of FINRA arbitration claims, many involving violations of 1934 Exchange Act and 10b-5 rules. If you believe you lost money due to negligence or fraud on the part of your FINRA registered broker dealer, please contact us for a free case evaluation.