Former Accounting Manager Sentenced for Insider Trading, Profiting Nearly $500,000 from Non-Public Information

A former accounting manager at a Pasadena-based company has been sentenced for insider trading. He used non-public information to purchase company shares, leading to nearly $500,000 in profits. He received a nine-month prison sentence and additional penalties.

In early 2021, Marco Antonio Perez, who worked at General Finance Corp., accessed confidential information about the company’s impending acquisition by United Rentals Inc. He used this insider knowledge to buy 66,585 shares at prices between $10 and $12 per share. Following the public announcement of the acquisition on April 15, 2021, the stock price surged to $19 per share. Perez then sold his shares, making a profit of approximately $488,533. Additionally, Perez tipped off two other individuals, allowing them to profit $127,140 and $34,867 respectively.

Defendant Information

• Name: Marco Antonio Perez, a.k.a. “Marc Perez”
• Age: 60
• Residence: Glendora, California

Details of the Crimes

As an accounting manager at General Finance Corp., Perez had access to confidential information, including emails about the company’s strategic decisions and acquisition plans. He misused this information for personal gain. Between February and March 2021, Perez bought 66,585 shares of General Finance stock at $10-$12 per share, knowing that the company would soon be acquired at a higher price of $19 to $20 per share.

On April 15, 2021, United Rentals announced the acquisition of General Finance at $19 per share. The stock price jumped from $12.17 to $19. Within two weeks of the announcement, Perez sold all his shares, making nearly $500,000 in profits. He also shared this insider information with two other individuals, who made significant profits as well.

Legal Charges

Perez was charged with insider trading for using non-public information to make stock purchases and for tipping off others to do the same. These actions violated federal insider trading laws and company policies. He was sentenced to nine months in federal prison and six months of home detention. Additionally, the SEC has a pending civil case against him, requiring him to disgorge his ill-gotten gains, pay prejudgment interest, and face further civil penalties.

Sentencing

Marco Antonio Perez was sentenced to nine months in federal prison, followed by six months of home detention. The court emphasized his breach of trust and exploitation of his position for personal gain. In addition to his prison sentence, he is required to return the profits made from his illegal activities and pay additional penalties as determined by the SEC.

Chronology of Events Leading to the Crime

In February and March 2021, Perez accessed confidential emails regarding the acquisition of General Finance by United Rentals. He then purchased 66,585 shares at $10-$12 per share. On April 15, 2021, United Rentals announced the acquisition at $19 per share, causing the stock price to surge. Perez sold all his shares within two weeks, making a profit of approximately $488,533. He also provided insider information to two other individuals, enabling them to profit $127,140 and $34,867 respectively. Following an investigation by the FBI, Perez was arrested and charged with insider trading.

Legal Analysis

Evidence against Perez includes his access to confidential information and his stock transactions, which correlate with the acquisition announcement. His actions violated fiduciary duties and company policies. The prosecution used email evidence and stock transaction records to demonstrate how Perez accessed and misused insider information. They highlighted his breach of trust and fiduciary duty. The defense could argue about Perez’s intent and mental state, potentially presenting mitigating factors such as his cooperation and acceptance of responsibility.

Potential Outcomes

Perez faces both criminal and civil penalties. Criminally, he is serving a nine-month prison sentence followed by six months of home detention. Civilly, the SEC case may result in disgorgement of profits, prejudgment interest, and additional civil fines. The case underscores the serious consequences of insider trading and the importance of adhering to legal and ethical standards in corporate roles.