Broker-dealer employee hit by SEC legal action

The Securities and Exchange Commission has taken legal action by filing insider trading charges against Jordan Meadow, a registered representative employed by broker-dealer Spartan Capital Securities in New York, and Steven Teixeira, chief compliance officer at international payment processing company Lian Lian Pay (LL Pay).

These charges are a result of accusations that Teixeira obtained information from his girlfriend’s laptop during the Covid-19 pandemic while she worked remotely. Teixeira has already pleaded guilty to federal charges of sneaking access to her laptop to get advance knowledge of Broadcom’s $61 billion acquisition of VMware, among other deals.

Teixeira’s girlfriend was an executive assistant at Morgan Stanley in New York, and had told him to check her work email while she was away during the workday, and to alert her if she received emails that required her attention.

Teixeira purportedly used this privileged information to purchase call options on the issuers in advance of the official deal announcements. He then shared the confidential details with acquaintances, including Meadow, prompting them to engage in similar trades.

The alleged scheme resulted in Teixeira reaping approximately $28,600 in illicit profits, while Meadow amassed over $730,000. To make matters worse, Meadow is accused of providing investment recommendations to his brokerage clients based on the inside information, leading to substantial profits for those clients and sizable commissions for himself.

Scott Thompson, associate regional director of the SEC’s Philadelphia regional office, commented, “Our complaint highlights the egregious breach of trust committed by Teixeira, who misused information from his girlfriend’s laptop for personal financial gain. Meadow, an experienced industry professional, willingly exploited the information to enrich himself. We are fully committed to pursuing and prosecuting cases of insider trading to ensure accountability for such actions.”

The SEC’s complaint has been officially lodged with the U.S. District Court for the Southern District of New York, charging Teixeira, a resident of New York, and Meadow, a resident of New Jersey, with violations of federal securities laws’ antifraud provisions. Seeking legal recourse, the SEC aims to obtain permanent injunctive relief, disgorgement of illicit gains with prejudgment interest, imposition of civil penalties, and the imposition of bans on Meadow and Teixeira from serving as officers or directors of public companies.

Concurrently, the U.S. Attorney’s Office for the Southern District of New York has independently announced the initiation of criminal charges against Meadow and Teixeira in connection with the case.

The SEC’s investigation, led by Norman P. Ostrove and Julia C. Green of the Market Abuse Unit, is currently ongoing. They receive support from John S. Rymas of the Market Abuse Unit’s Analysis and Detection Center.