The Securities and Exchange Commission (SEC) charged New York resident Barry Siegel with insider trading ahead of two Foot Locker, Inc. earnings announcements.
Siegel, the former senior director of order planning management for Foot Locker North America, agreed to the civil settlement after allegedly using material nonpublic information about sales and inventories to trade before two Foot Locker earnings announcements in 2023.
Siegel agreed to pay $235,714 to settle the SEC charges.
Foot Locker employed Siegal from 1998 to 2006 and from 2011 to 2023. The complaint states that Foot Locker terminated Siegel’s employment on August 9, 2023, amid a round of corporate layoffs.
According to the SEC’s complaint, Siegel had access to material nonpublic sales and inventory data as senior director of order planning management, North America at Foot Locker. While in that role, the SEC alleged that Siegel shorted Foot Locker stock in advance of the company’s first quarter 2023 earnings announcement in May 2023. The SEC further alleged that, after the announcement, Foot Locker’s stock price fell by 27.24 percent, and Siegel covered his short position for a $82,736.06 profit.
The complaint further alleged that, in early August 2023, about a week after being laid off from his job at Foot Locker, Siegel sold short Foot Locker stock again, this time in advance of the company’s announcement of its second quarter 2023 earnings. According to the complaint, the stock price fell by 28.28 percent after that announcement, and Siegel covered his short position with a $30,132.89 profit.
The SEC also alleged that before each of his trades, Siegel had in his possession material nonpublic information concerning Foot Locker’s operating results, including negative sales and inventory figures, and that he traded based on that information despite being subject to Foot Locker’s Policy Prohibiting Insider Trading.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charged Siegel with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
Without admitting or denying the allegations, Siegel reportedly consented to a judgment, subject to court approval, permanently enjoining him from future violations of the charged provisions, ordering him to pay disgorgement of $112,868.95 plus prejudgment interest of $9,975.97, imposing a civil monetary penalty of $112,868.95 and barring him from acting or serving as an officer or director of a public company.
The SEC said its investigation was conducted by Jeremy Brandt, Wes Wintermyer, Matthew Lambert, and Lauren Sheridan of the SEC’s New York Regional Office and was supervised by Celeste Chase and Sheldon Pollock.
To read a copy of the full complaint, go here.
Image courtesy Securities & Exchange Commission
