Oct 29 The U.S. Securities Exchange Commission filed a civil complaint Tuesday against a retired hedge-fund investment consultant and market analyst who allegedly participated in an insider trading scheme involving Atlanta-based clothing marketer Carter's Inc.
Dennis Rosenberg, 70, was able to trade in advance of marketing-moving news from Carter's based on tips received from a former executive at the company between 2005 and 2010, according to the complaint in federal court in Georgia.
Rosenberg passed along tips to investment advisers at two hedge funds, who also traded on the information, the complaint said.
The tips netted Rosenberg approximately $500,000 in ill-gotten gains, losses avoided and consulting fees based on tips to a hedge-fund client, the complaint said. The individuals who received the tips made about $2 million in combined losses avoided and profits, according to the complaint.
Rosenberg, who has not admitted or denied the allegations, has agreed to hand over $500,000, plus $108,000 in interest, the SEC said. A decision on civil monetary penalties will be made at a later date, according to the SEC.
A lawyer for Rosenberg declined to comment on the case.
Rosenberg is the second insider-trading case by the SEC over the alleged Carter's scheme. In August 2012, the SEC sued the company's former vice president of investor relations, Eric Martin, who agreed to a consent order in September barring him from serving as an officer or director at a public company.
Martin also pleaded guilty in December to a criminal charge for tipping others to non-public information while employed at Carter's, and is currently awaiting sentencing, according to the SEC.
Another former vice president at Carter's, Richard Posey, pleaded guilty in June to conspiracy to commit securities fraud in connection with alleged insider-trading, according to the complaint.
Carter's, a publicly listed company, markets apparel for babies and young children. In 2005, it acquired OshKosh B'Gosh Inc, a well-known children's clothing brand. The case is Securities and Exchange Commission v. Rosenberg, U.S. District Court for the Northern District of Georgia, No. 13-3559.