WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission said on Monday that it had fined Mark Begelman, a former head of Office Depot, for insider trading after he heard news of an imminent merger.
Begelman, who was president and chief operating officer of the office supplies retailer in the early 1990s, agreed to pay more than $30,000 to settle charges, the SEC said.
While at a retreat of business leaders in November 2011, the SEC said, Begelman learned that BFC Financial Corp was acquiring Bluegreen Corp.
“Begelman took advantage of confidential information he learned from another WPO member and illegally traded ahead of the merger announcement for nearly $15,000 in illicit profits,” the SEC said in a statement.
WPO, or the World Presidents’ Organization, is a professional organization of current and former executives at major companies.
Begelman’s source for the information was a high-ranking official at both Bluegreen and BFC, the SEC said.
During the retreat, in the Florida Keys, Begelman emailed his stockbroker, instructing him to buy 25,000 shares of Bluegreen, the SEC said. The next day, they spoke by phone, and Begelman bought the shares.
Bluegreen stock rose nearly 46 percent when BFC announced the acquisition on November 14, allowing Begelman to sell his holdings for a $14,949 profit, the SEC said.
Begelman, who did not admit or deny the charges, also agreed to be prohibited from serving as an officer and director of a public company for a period of at least five years. The settlement is subject to court approval.
Reporting by Douwe Miedema; Editing by Steve Orlofsky