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

The power of cultivating personal connections
The power of cultivating personal connections

Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.

A variety of succession options
A variety of succession options

Whichever path you go down, act now while you're still in control.

'I’ll never recommend bitcoin,' advisor insists
'I’ll never recommend bitcoin,' advisor insists

Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.

LPL raises target for advisors’ bonuses for first time in a decade
LPL raises target for advisors’ bonuses for first time in a decade

“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.

What do older Americans have to say about long-term care?
What do older Americans have to say about long-term care?

Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.

SPONSORED The future of prospecting: Say goodbye to cold calls and hello to smart connections

Streamline your outreach with Aidentified's AI-driven solutions

SPONSORED A bumpy start to autumn but more positives ahead

This season’s market volatility: Positioning for rate relief, income growth and the AI rebound