The U.S. Securities and Exchange Commission has sanctioned a Rockland accountant for trading on confidential information about a pending sale of Casper Sleep Inc.
Vincent Barbuto, 35, of Congers, consented to paying $43,443 in ill-gotten gains and penalties, according to an Aug. 1 cease-and-desist order.
“Barbuto owed his employer a duty not to disclose the confidential information,” the order states, but “breached that duty of trust and confidence.”
Barbuto provided accounting services to a New York City family office – a private wealth management firm – that the SEC order does not identify. His position made him privy to information about pending securities deals that had not been publicly disclosed.
A SEC anti-fraud rule prohibits disclosure of nonpublic information about securities, and the policies and procedures of Barbuto’s employer also restrict use of confidential information for any purpose other than the firm’s business.
From August to November 2021, Barbuto received company emails about a pending sale of Casper Sleep Inc., a Manhattan company that designs and sells mattresses, pillows and other sleep products.
Barbuto bought 5,095 shares of Casper stock for his personal IRA account, and he tipped off his father-in-law, who bought 6,000 shares for his personal brokerage account.
On Nov, 9, 2021, Barbuto received an email stating that the private equity firm was in final negotiations with Casper and that the deal could be announced soon. Barbuto bought another 1,500 share of Casper stock.
Before the U.S. stock markets opened on Nov. 15, 2021, Casper announced that it was being bought by a private equity firm.
Durational Capital Management agreed to pay $6.90 per share of stock. On the day of the announcement, the closing price rose by 88.45% from the previous day’s closing price.
Barbuto made a profit of $19,903.
Barbuto bought Casper stock and passed along confidential information to his father-in-law, the SEC says, “while knowing or being reckless in not knowing that the information he possessed was material and nonpublic.”
