Belmont Man Charged With Insider Trading
BOSTON - A Belmont resident was charged today in federal court with securities fraud, for trading on material non-public information regarding his employer.
Jospeh M. Tocci, 59, was charged in an Information with one count of fraud in connection with the offer, purchase or sale of a security. The charge arises from Tocci’s purchase of “putTocci Joseph PR” options for stock of the company where he worked, after he learned of bad news that had not yet been publicly announced.
The Information alleges that Tocci was an assistant treasurer at Devens-based American Superconductor Corporation (AMSC), a producer of components for the wind power industry. On March 31, 2011, Tocci learned from AMSC’s chief financial officer that there was a serious problem with AMSC’s largest customer, a Chinese company that was refusing new shipments and was refusing to pay for prior AMSC shipments. On April 1, 2011, Tocci purchased approximately $12,652 worth of “put” options on AMSC stock, notwithstanding a corporate blackout period that barred designated employees, including Tocci,from trading in AMSC stock. Those “put” options positioned Tocci to make money if the company’s stock price fell significantly before May 21, 2011. After the close of trading on April 5, 2011, AMSC publicly announced its anticipated financial results for the preceding year and quarter, and also announced the news regarding its largest customer. The following day, AMSC’s stock price dropped sharply. Over the next few days, Tocci sold his options for a net profit of approximately $82,440.
Tocci is expected to plead guilty to the charge pursuant to a plea agreement that, if accepted by the court, provides for a probationary sentence.
United States Attorney Carmen Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation – Boston Field Division made the announcement today. The case was investigated by the Federal Bureau of Investigation with assistance from the United States Securities and Exchange Commission. It is being prosecuted by Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes Unit.
The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.