The SEC has charged two former investment bankers over a 2021 share purchase, and its account of how the tip travelled runs through a basketball game and a calendar entry made at 12.12 in the morning
Paragraph 5 of the complaint is about a calendar entry.
The Securities and Exchange Commission filed insider trading charges on Friday against Gavin Wolfe and Jason Satsky over trading in South Jersey Industries, the New Jersey utility that agreed on 24 February 2022 to be bought at $36 a share. The case is in the Southern District of New York under docket number 26 Civ. 7132. Satsky, according to the complaint, was co-head of an energy and utility investment banking group and the lead banker on the sale, hired when South Jersey's chief executive telephoned him on 29 September 2021. The Commission does not name his employer.
What it does describe is a sequence.
The sequence the Commission sets out
On the evening of 9 November 2021 the two men attended a televised basketball game together at Madison Square Garden, the complaint says, and spent about three hours there. Within minutes of the game ending, it alleges, Wolfe created a calendar entry for himself at 12.12 a.m. reading "SJi and njr", the ticker symbols of South Jersey and one other company, and scheduled it for 9.15 that morning. The Commission alleges he transferred nearly $2.2m into a trading account on 10 November and told his investment manager to start buying.
The first purchase came on 11 November: more than 100,000 shares, and by the Commission's account the first time he had ever bought the stock. Buying continued to 1 December. In all he accumulated more than 2.2 million shares at a cost of at least $53m, spread across eight entities he owned or controlled, all eight of which are named in the caption as relief defendants.
The complaint sets that $53m against his own record. Over the preceding three and a half years, it says, his eight next largest single month stock purchases ranged from about $2.4m to about $16.6m.
What the announcement was worth
South Jersey shares rose $9.36 on 24 February 2022 and closed at $32.84, about 40 percent above the previous close. The Commission puts Wolfe's unrealised profit at approximately $18.5m, a net return of about 36 percent. It alleges he also tipped three friends and business colleagues who bought shortly after he contacted them and made about $515,000 between them.
Two later episodes are in the filing. After the announcement, the Commission says, a financial regulator prompted the bank to run an internal inquiry into trading in South Jersey stock ahead of the deal, and Satsky described his relationship with Wolfe as "client and former power/utilities banker, periodic ordinary course coverage" without disclosing the friendship or their contacts during the sale process. In February 2024, it says, FBI agents questioned Wolfe about the trading and he told them he did not recall directing the purchases; the Commission alleges those statements were false.
Both men are charged under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The Commission is asking for permanent injunctions, civil penalties and officer and director bars against both, disgorgement with prejudgment interest from Wolfe, a conduct based injunction against Satsky, and disgorgement from the eight relief defendants.
None of it is proved. These are allegations in a civil complaint filed two days ago, no answer has been entered, and no response from either man appears in any document read for this item.
