Originally published at www.seclive.com
A former Green Mountain Coffee Roasters (NASDAQ:GMCR) information systems technology manager and his friend have been charged by the Securities and Exchange Commission for insider trading. The IT manager, Chad McGinnis, and his friend, Sergey Pugach, have been charged for purchasing company stock options just ahead of the company's earnings release. Referencing public reaction to the company's quarterly earnings announcements, McGinnis and Pugach correctly assessed how the public would react to the earnings release. By correctly predicting the movement of the company's stock price, the two men made $7M. McGinnis used his access to draft earnings announcements to gain insider information that was not publicly available and, by executing the trades based on that information, violated federal law. Green Mountain President and CEO Brian Kelley remarked that the company is outraged by the actions of this lone individual and have every reason to believe this was the effort of a single employee.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.