Washington — Steven C. Watson, a Lynnfield, Mass., man who allegedly engaged in insider trading based on information about the abortive acquisition of Cooper Tire and Rubber Co. by Apollo Tyres Ltd., has settled with the US Securities and Exchange Commission (SEC).
The SEC filed the settlement agreement with the US District Court for the District of Massachusetts 17 Nov.
According to the document, Watson received confidential information about the Cooper-Apollo deal from Amit Kanodia, an entrepreneur and private equity investor based in Brookline, Massachusetts. Kanodia had received the information from his wife, then Apollo’s general counsel, who was intimately involved in the negotiations between Apollo and Cooper.
Watson obtained almost $170,000 from trading in Cooper stock based on this information and, according to the court filing, paid a kickback to Kanodia through a bank account held in the name of a supposed charity that Kanodia controlled.
The SEC seeks:
A permanent injunction against Watson for any acts of insider trading;
Surrender of all the money he obtained through insider trading, plus pre-judgment interest; and
Payment of all civil penalties required by SEC regulation.
The agreement is subject to the approval of Judge Allison Burroughs of the Massachusetts court.
In April 2015, the SEC brought fraud charges in Connecticut federal district court against Kanodia and venture capitalist Iftkar Ahmed in connection with insider trading in the Cooper-Apollo deal. That case is still pending.