Adviser’s insider trading more extensive than SEC thought

An investment adviser who was sanctioned for insider trading last year is now being charged for additional illicit trading in the same stock.

Last year, the U.S. Securities and Exchange Commission (SEC) settled with Charles Rustin “Rusty” Holzer, a former broker and the manager of a family investment office, for insider trading in options of Dun & Bradstreet Corp., ahead of the company’s acquisition in 2018.

Holzer settled that case, without admitting to or denying the regulator’s allegations, agreeing to pay $869,000 in penalties and disgorgement.

Today, the SEC filed a second round of charges against Holzer — alleging that, in addition to the options trading that he was previously sanctioned for, he also traded Dun & Bradstreet stock around the same time in offshore accounts.

The additional insider trading, not originally disclosed to the regulator, generated $391,308 in ill-gotten profits, the SEC said.

Holzer again agreed to settle the charges without admitting to or denying the allegations, and to pay a $1.17 million penalty.

The offshore entities also agreed to settle, disgorging the illicit trading profits. The proposed settlements remain subject to court approval.

“We allege that Mr. Holzer is a serial insider trader whose conduct merits the stiffest penalties available to the commission,” said Gurbir Grewal, director of the SEC’s enforcement division, in a release.

“In this case, a fine equal to three times his illicit trading profits sends a strong deterrent message not just to Mr. Holzer, but also to others who may contemplate engaging in such conduct,” he said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.