The Securities and Exchange Commission (SEC) announced last week that it is charging a former Green Mountain Coffee employee and his friend with insider trading.
According to the SEC release, Chad McGinnis, who used to work as a systems administrator for Green Mountain, purchased Green Mountain securities shortly before earnings announcements. The SEC also alleges that McGinnis tipped off his friend, Sergey Pugach, to inside information, and Pugach made trades in his own and his mother’s accounts. The complaint says both men made about $7 million during 12 of the past 13 quarters earnings announcements. Their illegal activity, the SEC says, began in 2010.
“McGinnis and Pugach exploited confidential company financial data to conduct their insider trading scheme to the detriment of Green Mountain Coffee and its shareholders,” Donald Hoerl, Director of the SEC’s Denver Regional Office, said in a statement. “The timing of their trades was consistently and exceptionally successful, but their scheme ultimately was not.”
The SEC filed its complaint on July 24 under seal. A hearing is set for later this week.
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