Skip to main content
Press Release

Manhattan Hair Salon Owner Pleads Guilty To Insider Trading

For Immediate Release
U.S. Attorney's Office, Southern District of New York

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ABELL OUJADDOU pled guilty to participating in a scheme to trade in the stock of the Valspar Corporation (“Valspar”) based on material nonpublic information relating to another’s company’s efforts to acquire Valspar.  OUJADDOU pled guilty to one count of conspiracy to commit securities fraud before U.S. District Judge Jed S. Rakoff.

U.S. Attorney Geoffrey Berman said: “Abell Oujaddou, a salon owner and hairstylist, pled guilty today to receiving favorable material nonpublic information about Valspar’s stock, and then trading on that information before it became public, netting nearly $200,000 in illegal gains.  As he admitted today, Oujaddou – who had never previously traded Valspar stock – was given the tip by his co-defendant, who worked at a rating agency and had access to inside information about the acquisition of Valspar.  Our Office will continue to fight insider trading and ensure that those who cheat in our financial markets are held to account.”

According to the allegations contained in the Complaint and Indictment filed against OUJADDOU and his co-conspirators, and statements made in related court filings and proceedings:[1]

Rating Evaluation Services and the Insider

When a company announces an acquisition, the acquiring company’s credit rating agency often evaluates, and ultimately issues a press release relating to, the impact that the acquisition could have on the acquiring company’s credit rating.  Therefore, companies often contact rating agencies before an acquisition is publicly announced in order to secure the rating agency’s views on how a possible acquisition could impact a company’s credit rating.  All the major rating agencies offer a service – sometimes known as a Rating Evaluation Service (“RES”) – that provides the company with a rating committee decision with respect to a proposed acquisition.

In March 2016, a credit rating agency in Manhattan (the “Firm”) assigned Sebastian Pinto-Thomaz, a credit ratings analyst, to work on an RES for the Sherwin-Williams Company (“Sherwin-Williams”) in advance of its contemplated but unannounced acquisition of the Valspar Corporation (“Valspar”).  In connection with this assignment, Pinto-Thomaz had access to confidential information about Sherwin-Williams’ acquisition of Valspar prior to the public announcement of the acquisition.  The Firm’s written policies prohibited the unauthorized disclosure of confidential information, which included the information about the possible acquisition of Valspar (the “Inside Information”).  During his tenure at the Firm, Pinto-Thomaz reviewed and certified his duties of loyalty and confidentiality to the Firm and its clients.

The Insider Trading Scheme

In March 2016, Pinto-Thomaz misappropriated the Inside Information about Sherwin-Williams’ acquisition of Valspar and passed it to OUJADDOU and Jeremy Millul so that they could use it to make profitable trades.  On March 21, 2016, the first trading day after the public announcement of the acquisition, the price of Valspar stock increased approximately 23 percent over the prior day’s close.

OUJADDOU is a Manhattan hairstylist and salon owner who has a close relationship with Pinto-Thomaz, as well as with a member of Pinto-Thomaz’s immediate family (the “Relative”).  Pinto-Thomaz repeatedly provided OUJADDOU with Inside Information about the Valspar acquisition, oftentimes shortly after Pinto-Thomaz became aware of the Inside Information through his work at the Firm.  From March 10, 2016, through March 18, 2016, OUJADDOU, who had never previously purchased Valspar or Sherwin-Williams’ securities, used the Inside Information he had received from Pinto-Thomaz to purchase 8,630 shares of Valspar stock.  After the acquisition was publicly announced, OUJADDOU sold his Valspar shares for approximately $192,080 in profits.  OUJADDOU admitted that he agreed to give Pinto-Thomaz a portion of OUJADDOU’s trading profits in exchange for the Inside Information.

Millul is a Manhattan jeweler who has a close personal friendship with Pinto-Thomaz and the Relative.  Pinto-Thomaz also provided Millul with Inside Information about the Valspar acquisition.  Although Millul had never owned a brokerage account in the United States and had never traded in U.S. securities prior to March 2016, he opened a brokerage account on March 13, 2012, and shortly thereafter purchased 480 shares of Valspar common stock.  On March 18, 2016, the last trading day before the acquisition was publicly announced, Millul also purchased 75 Valspar out-of-the-money call options. After the acquisition was publicly announced, Millul sold his Valspar stock and options for approximately $106,806 in profits. In December 2016, Millul gave Pinto-Thomaz $3,500 in cash.

Pinto-Thomaz Makes False Statements About OUJADDOU and Millul in Connection with a FINRA Inquiry

In June 2016, the Financial Industry Regulatory Authority (“FINRA”) sent the Firm a list of individuals and entities that had traded in Valspar in advance of the public announcement of the acquisition (the “List”).  The Firm forwarded the List to its employees who had worked on the Sherwin-Williams RES, including Pinto-Thomaz, asking the employees to respond by stating whether they had a past or present relationship with any individual or entity on the List. Although both OUJADDOU and Millul were on the List, Pinto-Thomaz denied having a relationship with anyone on the List. 

*                    *                    *

ABELL OUJADDOU, 55, of New York, New York, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense.  The maximum potential sentence in this case is prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the Court.

OUJADDOU is scheduled to be sentenced on February 5, 2019 at 4 p.m.

Mr. Berman praised the work of the FBI, and thanked the SEC for its assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.


[1] As for the defendants who have pled not guilty, Sebastian Pinto-Thomaz and Jeremy Millul, the description of the charges set forth herein constitute only allegations.

Updated October 3, 2018

Securities, Commodities, & Investment Fraud
Press Release Number: 18-338