A Westport executive who co-founded Compass Group Management settled insider trading charges levied by the U.S. Securities and Exchange Commission (SEC) for $1.4 million, the regulator announced Nov. 30.
The SEC alleges that I. Joseph Massoud used access to nonpublic information relating to the 2009 sale of Patriot Capital Funding Group to realize a profit of $676,000 after the firm was sold to New York City-based Prospect Capital.
In the SEC’s announcement of the settlement, Massoud neither admitted nor denied the charges.
According to court documents filed by the SEC, Westport-based Compass Group, an investment advisory firm, was among the companies seeking to acquire Patriot Capital, which was also founded by Massoud and which went public in 2005.
Court documents state that Massoud and Compass Group had access to confidential information as part of the bidding process. According to the SEC, Compass Group signed a confidentiality agreement that banned the firm and its employees from trading in Patriot Capital stock.
However, the SEC alleges Massoud broke the agreement by purchasing more than 322,000 shares in Patriot Capital, which resulted in a profit of $676,000 when the sale was announced later that year.
As part of the settlement, Massoud will be barred from working in the securities industry or serving as an officer or director of a public company.
The settlement is subject to court approval.