Former Coca-Cola bottling executive charged with insider trading
A former executive at a Coca-Cola bottling company was charged with insider trading Thursday for allegedly turning an overnight profit of 30 percent based on confidential information.
As the Securities and Exchange Commission tells it, Steven J. Harrold knew better.
In early 2010, when he was briefed on the company’s plan to acquire other bottling operations, the agenda was marked “Strictly Private & Confidential,” the SEC said.
The former vice president at Coca-Cola Enterprises signed a non-disclosure agreement pledging to keep information about the deal private, and he received an e-mail from a company lawyer on Feb. 16, 2010, saying that he was prohibited from trading the company’s stock “until further notice,” the SEC said in a civil suit.
But on Feb. 24, 2010, Harrold bought 15,000 shares of Coca-Cola Enterprises using a brokerage account in his wife’s name, the SEC said.
The next day, Coca-Cola Enterprises announced the deal, the company’s stock soared and Harrold reaped a profit of about $86,850 on an investment of about $289,500, the SEC said.
“Harrold deliberately flouted the federal securities laws and specific company restrictions,” Rosalind R. Tyson, director of the SEC’s Los Angeles office, said in a statement.
An attorney for Harrold declined to comment.
Harrold joins a long list of people accused of succumbing to the lure of easy profits — hedge fund traders, corporate lawyers, management consultants, board members and a chemist at the Food and Drug Administration, among others.
Harrold, 53, was terminated by Coca-Cola Enterprises (CCE) last year in connection with his trading, the SEC said. He lives in Los Angeles and London and was a London-based vice president for strategy and innovation, the SEC said.
The bottling company’s counterpart in the 2010 transaction was the Coca-Cola Co., which sells the soft-drink syrup to CCE and other bottlers. The deal called for the CCE to acquire bottling operations in Norway and Sweden.
Harrold admitted during the company’s investigation that he placed the trades in his wife’s account and that he had received notice of the trading ban before he bought the stock, the SEC said.
It was not the first time Harrold used the account to trade in CCE stock when prohibited from doing so, the SEC said.
The SEC is seeking to fine him and force him to give up his allegedly ill-gotten gains.