SEC charges broker with insider trading tied to stolen laptop secrets

The SEC is going after a New York broker it says traded on stolen deal intelligence funneled through a remote-work security gap. 

Ronald Smith, a former registered representative at a New York-based broker-dealer, is facing an SEC enforcement action alleging he made more than $530,000 in illicit profits by trading on material nonpublic information tied to two corporate transactions — the Penn Entertainment acquisition of Score Media and Gaming, and a potential acquisition of VMWare. 

The case (SEC v. Ronald Smith, Case No. 1:26-cv-02582, S.D.N.Y.) lays out what the regulator describes as a multi-layered tipping chain that started with a laptop left unattended in a Queens apartment. 

According to the SEC, Steven Teixeira — who, notably, was employed as a Chief Compliance Officer at an international payment processing company — lived with an executive assistant at a New York-based investment bank. The assistant's job involved scheduling valuation and fairness committee meetings tied to confidential M&A transactions. Starting in or about July 2020, she worked remotely from their shared apartment, logging into the bank's systems on her personal laptop. 

The SEC alleges Teixeira gave her a device that simulated mouse movement, keeping her laptop active while she stepped out. With the system kept from locking, Teixeira allegedly accessed her Outlook calendar and reviewed attachments containing the names and deal terms of upcoming transactions — without her knowledge or permission. 

From there, the SEC says, the information moved through a friend identified only as Individual 1 to Jordan Meadow, another registered representative at the same brokerage firm where Smith worked. The regulator claims all three discussed the arrangement during a car ride from New York to Hoboken, New Jersey, in March 2021. 

Meadow allegedly passed the tips to Smith — his close friend and officemate in Manhattan — who then traded on the information in his own account, placed trades in the brokerage account of his then-girlfriend (now wife), and recommended the same stocks to their shared brokerage customers. 

The numbers are striking. When Smith allegedly bought 500 Score call option contracts on August 2, 2021, those purchases accounted for roughly 60 percent of that day's volume in those contracts. Score's stock closed at $17.55 that day. Three days later, the Penn Entertainment deal was announced and the stock surged nearly 80 percent. 

On VMWare, Smith allegedly purchased call options in May 2022, ahead of Bloomberg reporting Broadcom's interest in the company. The stock jumped approximately 24 percent the next trading day. 

All told, the SEC says Smith pocketed more than $530,000 in his own account and over $25,000 in his girlfriend's account. Roughly 60 of Smith and Meadow's brokerage customers purchased over 300,000 shares of Score stock — spending more than $6 million — and walked away with over $5 million in profits. Those trades generated hundreds of thousands of dollars in commissions the two brokers split. 

The SEC also alleges the pair discussed compensating their sources, with Meadow floating the idea of buying Rolex watches for Teixeira and Individual 1. 

The regulator is seeking disgorgement, civil penalties, and a permanent bar from the securities industry. A related criminal case against Meadow is pending in the same court. No final determination has been made in this matter. 

For compliance teams at wealth management and brokerage firms, the case is a sharp reminder that remote-work vulnerabilities have not gone away. The allegation that a mouse-jiggling device was enough to defeat an investment bank's security controls — and that a compliance professional was the one allegedly exploiting the gap — should give every firm reason to revisit how sensitive information is protected outside the office.