(Adds a comment from attorney for Schlossberg, notes that lawyer for Nash declined to comment)
By Sarah N. Lynch
WASHINGTON, Aug 14 (Reuters) - An Atlanta-based accountant agreed on Thursday 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 Inc.
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 Smith, Adcock and Company.
A woman who answered the telephone at Smith Adcock declined to comment and abruptly hung up.
Toth declined to comment in an email to Reuters.
Russell Ryan, a partner with King & Spalding who represents Schlossberg said his client made the “economically rational decision” to resolve the matter “through an amicable resolution in which there were no findings or admissions of wrongdoing.”
Attorneys for Nash and Moshe Manoah both 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 and Andre Grenon)