Former SEC accountant pleads guilty to illegal securities trading — and then lying about it

David R. Humphrey also settled parallel civil charges with the SEC and will pay more than $108,000 in penalties.
MAY 09, 2017

A former SEC accountant has pleaded guilty to filing false ethics forms in order to conceal his illegal options trading while working at the agency. David R. Humphrey, who worked in the Securities and Exchange Commission's Division of Corporate Finance from 1998 to 2014, used his office computer during business hours to trade prohibited securities, including put options on Citigroup shares, the Justice Department said. Mr. Humphrey also settled parallel civil charges with the SEC and will pay more than $108,000 in penalties, ill-gotten profits and pre-judgment interest and will be permanently suspended from practicing as an accountant on SEC matters, the regulator said. The SEC's charges against Humphrey were unusual because the agency rarely takes enforcement action against one of its own employees, even those who have faced criminal prosecutions for ethics violations related to trading, Reuters said in a report. Mr. Humphrey's trading was conducted for his own accounts, as well as for his mother and a friend, the SEC said. When questioned by the SEC's Office of Inspector General about his trading activities during an investigation in 2014, Mr. Humphrey continued to lie about his trading, the SEC said in a release. The SEC prohibits all employees from trading in options or derivatives, and requires staff to disclose their securities holdings and transactions to the agency's ethics office in annual filings. According to Reuters, Mr. Humphrey is not accused of using material non-public information for his trades, and quotes the SEC as saying that he often suffered "significant losses."

Latest News

Edward Jones facing more race bias claims in new lawsuit
Edward Jones facing more race bias claims in new lawsuit

A private partnership, Edward Jones is a giant in the retail brokerage industry with more than 20,000 financial advisors.

Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team
Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team

Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.

SEC chief Atkins signals caution on prediction market ETFs amid broader rethink of novel fund structures
SEC chief Atkins signals caution on prediction market ETFs amid broader rethink of novel fund structures

Paul Atkins has asked staff to solicit public comment on novel ETFs, pausing the clock on as many as 24 filings linked to the booming event contracts market.

Private capital's $1 trillion bet on the American retirement account
Private capital's $1 trillion bet on the American retirement account

From 401(k)s to retail funds, Deloitte sees private equity and credit crossing into mainstream investing on two fronts at once.

Advisor moves: Wells Fargo Advisors pulls in $9.6b in fresh talent during first half of May
Advisor moves: Wells Fargo Advisors pulls in $9.6b in fresh talent during first half of May

Big-name defections from Morgan Stanley, UBS, and Merrill Lynch headline a busy two weeks of recruiting for the wirehouse.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management