BOSTON (CN) - The SEC on Friday charged a group of golfing buddies with making $554,000 through illegal inside trading based on tips from one of the fivesome.
In its federal complaint, the SEC claims that Eric J. McPhail, of Waltham, Mass., repeatedly gave nonpublic information about American Superconductor to six other people, most of them "fellow competitive amateur golfers."
McPhail got the tips from an American Superconductor executive who belonged to the same country club, the SEC said in a statement.
The SEC said the expected "trust(ed) that McPhail would keep the information confidential," but he did not.
Instead, the SEC said, McPhail "misappropriated the inside information about the energy technology company and fed it to his friends, often via email. The insider-trading ring included a handful of golfing buddies, four of whom live in Massachusetts: Douglas A. Parigian of Lowell, John J. Gilmartin of Andover, Douglas Clapp of Walpole, and James A. 'Andy' Drohen of Granville. The fifth, Drohen's brother, John C. Drohen, is a resident of Cranston, R.I. In addition to the group of golfers, McPhail tipped a sixth man, his longtime friend Jamie A. Meadows, of Springfield, Mass. Each of the six traded and profited on the inside information McPhail supplied to them."