WASHINGTON Aug 14 An Atlanta-based accountant on Thursday agreed to pay a fine to settle a civil insider-trading case in which U.S. regulators accused him of trading in and sharing confidential information about a restaurant stock ahead of a tender offer announcement.
The Securities and Exchange Commission said Donald S. Toth "disregarded his fiduciary duty" to a client after he bought stock in O'Charley's Inc., a restaurant company later acquired by Fidelity National Financial.
The SEC said Toth called his financial advisor and arranged to buy 5,000 shares of O'Charley's after his client revealed the impending acquisition during a tax-planning meeting.
Toth also allegedly tipped off two other clients, James A. Nash and Blair G. Schlossberg. Nash bought 10,000 shares, while Schlossberg tipped his business partner, Moshe Manoah, and the two of them jointly bought stock using an account held by Manoah's wife, the SEC said.
The other three who allegedly traded were also charged by the SEC on Thursday and agreed to settle their cases.
The SEC said more than $160,000 in illegal profits were generated by the four men. Together, they will pay more than $420,000 to settle the charges without admitting or denying them.
The SEC's case did not say where Toth was employed, but a Donald S. Toth is listed as an accounting partner in the Atlanta office of the firm Smith, Adcock and Company.
A woman who answered the phone at Smith Adcock declined to comment and abruptly hung up.
Toth declined to comment in an email to Reuters. An attorney for Toth was traveling and could not be immediately reached. Attorneys for Nash and Schlossberg could not be immediately reached, and a lawyer for Moshe Manoah declined to comment.
"As an accountant, Toth had a duty to keep confidential the information shared by his client for tax-planning purposes, but instead he misused it for personal investments and provided the details to other clients for their misuse," said William Hicks, the associate director of enforcement of the SEC's Atlanta office. (Reporting by Sarah N. Lynch; Editing by Paul Simao)