District-Based Financial Services Professional Pleads Guilty to Federal Charge of Insider Trading
Defendant Admits Using Non-Public Information for Personal Benefit
WASHINGTON – George Haywood, 69, of Washington, D.C., pleaded guilty today to one count of insider trading, announced U.S. Attorney Matthew M. Graves and Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division.
Haywood pleaded guilty in the U.S. District Court for the District of Columbia. The Honorable Reggie B. Walton scheduled sentencing for Nov. 9, 2022.
“Insider trading undermines faith in our financial markets and harms ordinary investors who play by the rules,” said U.S. Attorney Graves. “George Haywood placed himself above the law by using information to which he had privileged access to cheat the market and other investors. Our Office will continue to work with our law enforcement partners to maintain the integrity of the financial markets.”
“Mr. Haywood put himself and his own financial interests above the rule of law,” said Special Agent in Charge Jacobs. “The FBI will not stand by while individuals attempt to abuse access to non-public information. I’d like to thank those who investigated this case and who work every day to ensure individuals are held accountable for damaging the integrity of our financial markets.”
According to court documents, Haywood is a District of Columbia-based financial services professional who managed investments on behalf of his family and friends. On Jan. 22, 2020, at approximately 9 a.m., Neurotrope, a clinical-stage biopharmaceutical company (now known as Synaptogenix) announced that it was being awarded a $2.7 million grant from the National Institutes of Health following positive clinical trial results for a medicine for the treatment of Alzheimer’s disease. This resulted in an increase of its stock price to a high of $3.85 per share.
Later that day, at approximately 12:50 p.m., Haywood spoke to a representative of Neurotrope by telephone. The person offered to share material non-public information relating to Neurotrope with Haywood so long as Haywood agreed not to execute or attempt to execute any stock trades with the information. Haywood agreed to receive material non-public information, subject to these conditions. The representative then informed Haywood that Neurotrope would issue a registered direct offering later that day and invited him to participate in it. The offering was expected to cause Neurotrope’s stock price to fall.
Immediately after receiving material non-public information, Haywood sold or attempted to sell shares of Neurotrope worth over $328,701.16, despite having agreed to receive the information, and not to execute or attempt to execute any stock trade with it. Based on the daily closing price of $1.42 per share, Haywood avoided a loss of at least $179,297.18 on the sale of those shares between the time he received the material non-public information, and the time the registered direct offering was announced to the public.
The case was investigated by the FBI’s Washington Field Office and is being prosecuted by Assistant U.S. Attorneys Elizabeth Aloi and John Borchert.
A parallel civil enforcement proceeding was filed by the Securities and Exchange Commission’s Philadelphia Regional Office, under the direction of Norman P. Ostrove: https://www.sec.gov/litigation/litreleases/2022/lr25440.htm