A Deerfield man has been charged in federal court after prosecutors say he committed insider trading, profiting almost $100,000, after learning the company his wife worked for was being acquired.
Brian Rubin, 51, of Deerfield, was charged this week in the U.S. District Court of Northern Illinois with one count of securities fraud.
The U.S. Securities and Exchange Commission (SEC) said Rubin committed insider trading in stock options of Array BioPharma Inc.
The trading occurred in advance of an announcement that Pfizer, Inc. was acquiring Array via a tender offer, the SEC said.
A complaint filed in federal court alleges that Rubin unlawfully traded Array stock options based on material, non-public information about the acquisition that he learned about from his wife, who worked at Array.
The complaint said Rubin’s trading of Array stock options prior to the announcement of the acquisition resulted in illegal profits of $90,458.
The U.S. Attorney’s Office in Chicago said Wednesday that Rubin made the profits in the spring of 2019. Prosecutors said Rubin’s wife was not aware of his actions.
The complaint said Rubin’s wife had told her husband about the looming acquisition after hearing about it from coworkers.
The woman told Rubin that her job would be eliminated if Array was acquired.
“Instead of keeping the information confidential, Rubin traded Array stock options on the basis of the material, nonpublic information he misappropriated from his spouse,” the complaint said.
The SEC said Rubin previously worked as an options trader and understood that he could leverage the information by trading Array stock options.
The man contacted his investment advisor to obtain options trading authorization in a brokerage account, the complaint said.
“In order to trade options in the Brokerage Account, Rubin needed both his and his spouse’s signatures on the options trading application. Rubin did not tell his spouse that he was going to trade in Array stock options. Nevertheless, Rubin signed both his and his spouse’s name on the application so that he could do so,” the complaint said.
After the acquisition announcement, Array’s stock price increased and Rubin exercised the options for the profit, prosecutors said.
Rubin has agreed to pay $90,458 in addition to $16,914 of interest after the SEC took civil action separate from his criminal case.
The charge against Rubin carries up to 20 years in federal prison. An arraignment hearing has not been scheduled yet.