Wednesday, October 4, 2023
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SEC Wants $350,000|From Inside Trader

MANHATTAN (CN) - Stock trader Joseph Mancuso made $350,000 trading illegally on inside information he got from "his good friend and colleague" Zvi Goffer, the SEC claims in a federal complaint that features a string of well-known Wall Street figures.

"Mancuso's trading based on Zvi's tips resulted in illicit profits of approximately $350,000," the SEC says in its complaint. Mancuso, 36, of New York City, is the only defendant.

But "other relevant individuals and entities" listed in the complaint include several people caught up in the inside-trading scandals. They include Arthur Cutillo, Brien Santarlas, Zvi Goffer, Roomy Khan, Jason Goldfarb, six other traders and/or lawyers, the Schottenfeld Group and the Ropes & Gray law firm.

Mancuso was so close to Goffer he was called "mini Zvi," according to the complaint.

The complaint states: "This case involves an insider trading scheme in which Zvi Goffer ('Zvi'), a former proprietary trader at the broker-dealer Schottenfeld Group, LLC, ('Schottenfeld'), tipped his good friend and colleague, defendant Joseph M. Mancuso, ('Mancuso'), and others, [to] material nonpublic information concerning upcoming corporate acquisitions. Throughout 2007, Mancuso, also a proprietary trader at Schottenfeld, used the inside information he received to trade ahead of corporate acquisitions or bids, including the announced acquisitions of Avaya, Inc., 3Com Corp., Axcan Pharma Inc., Hilton Hotels Corp., and Kronos Inc. Mancuso's trading based on Zvi's tips resulted in illicit profits of approximately $350,000." (References to abbreviated corporate names omitted.)

The SEC claims that the inside information Goffer offered also was misappropriated by Ropes & Gray attorneys Cutillo and Santarlas, to whom Goffer paid kickbacks for inside information, using their mutual friend, attorney Goldfarb, as a conduit.

The SEC seeks disgorgement, with interest, and wants Mancuso ordered not to do it again.

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