Florida Investment Adviser Settles Insider Trading Allegations with SEC

SEC Files Insider Trading Charges Against Charles Rustin Holzer

The SEC has once again taken legal action against Charles Rustin Holzer, a family office executive and former broker. This comes after Holzer settled SEC charges last year related to his trading in options of Dun & Bradstreet Corp. (DNB) based on insider information. The latest complaint from the SEC alleges that Holzer engaged in unlawful trades involving DNB stock through undisclosed offshore accounts, in addition to the options trades previously scrutinized by the SEC.

The Allegations

According to the complaint filed by the SEC, nine days before an acquisition announcement on August 8, 2018, Holzer, who resides in Wellington, Florida, obtained material nonpublic information about DNB’s prospective acquisition. This information was shared with him by an investment adviser under a non-disclosure agreement that explicitly prohibited disclosure or trading on this confidential information.

The SEC alleges that Holzer used this privileged information to acquire 23,000 shares of DNB stock through offshore accounts associated with two Cayman Islands-based entities he directly or indirectly controlled: Maglione International Ltd. and Frontenac Investments Ltd. These unauthorized trades resulted in illicit profits totaling $391,308. Notably, these offshore transactions occurred around the same time as the options trades previously under investigation, yet Holzer failed to report these offshore activities to the SEC.

The Settlement

Holzer, without admitting or denying the SEC’s allegations, has consented to settle the charges by agreeing to a final judgment. This judgment will permanently enjoin him from violating the securities laws’ charged provisions and require him to pay a civil penalty of $1,173,926. Maglione and Frontenac, similarly without admitting or denying the allegations, have consented to final judgments mandating that they disgorge $331,389 and $59,920, respectively. These figures represent the profits from Holzer’s DNB trading in their respective accounts, along with prejudgment interest.

Please note that the proposed settlements are subject to court approval.

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Sallah Astarita & CoxRepresenting Advisors and Investors, Nationwide.
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