NEWARK (CN) - For $35,000 and a jet ski dock, a Florida stockbroker tipped a crony to inside information on a pharmaceutical merger, and the crony and a friend made $708,300 by trading illegally on it, the SEC claims in court.
The SEC sued Kevin L. Dowd, 37, of Boca Raton, in Federal Court.
It claims that Dowd, a registered broker-dealer, tipped a friend that Gilead Sciences was about to buy Pharmasset. In such deals, stock in the company being purchased typically goes up.
"Tippee 1" passed along the inside information to his friend, "Tippee 2," and the two of them made $708,327 on the stock in just two days, the SEC says in the complaint.
Pharmasset shares rose from $72.67 to $134.14 on the news, and both Tippees cashed in on it, the SEC says.
"In exchange for Dowd's profitable tip, Tippee 1 provided Dowd with a jet ski dock and $35,000," the SEC says in its complaint.
It seeks disgorgement, penalties and a court order telling Dowd not to do it again.
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