The Securities and Exchange Commission charged five physicians last week with insider trading in the securities of a medical professional liability insurer. As law firm Gibson Dunn expressed it in a recent client communication: “The SEC and the nationwide criminal authorities will likely continue their aggressive and extremely successful prosecution of insider trading for the foreseeable future.”
The SEC alleged that Apparao Mukkamala, a board member of American Physicians Capital Inc. (ACAP), shared nonpublic information about the anticipated acquisition of ACAP by another insurance company. According to the SEC, Mukkamala and his friends and family members made more than $623,000 in illegal profits on their ACAP stock following the announcement.
The physicians agreed to pay a combined total of more than $1.9 million to settle the SEC’s charges. The full SEC press release can be found at http://www.sec.gov/news/press/2012/2012-132.htm.