Nelson “Frank” Molina, formerly the company’s head of investor relations and treasurer, admitted to buying 13,600 shares of ClubCorp stock after hearing of its possible sale. He later made a $78,000 net profit after ClubCorp was acquired. Through the settlement he will “disgorge his ill-gotten gains” and also pay a penalty of $39,230.
The U.S. Securities and Exchange Commission (SEC) announced on July 5th that it has settled its insider-trading case against former ClubCorp Holdings Vice President Nelson “Frank” Molina, the Dallas Business Journal reported.
In documents filed in federal court in Dallas, the SEC’s Fort Worth, Texas regional office said that Molina was head of investor relations and treasurer in 2016 for the Dallas-based company when he learned about the possible sale of ClubCorp to another company, the Business Journal reported.
SEC documents show that Molina, who is now 47 and lives in Frisco, Texas, bought 13,600 shares of ClubCorp stock for $11.58 a share based on the information, which was not publicly available, the Business Journal reported. The next day, news of a potential acquisition (http://clubandresortbusiness.com/2017/07/clubcorp-bought-apollo-global-management-1-1-billion/) was made public and ClubCorp shares jumped 15.6 percent. Molina later sold his stock for a $78,000 net profit.
The illegality came to light when the Financial Industry Regulatory Authority contacted ClubCorp four months after Molina bought the shares, the Business Journal reported. ClubCorp officials asked Molina about his stock buy and Molina acknowledged his unlawful trading and promptly resigned from the company.
Molina and his outside legal counsel reported his misconduct to the SEC and cooperated with its investigation, the Business Journal reported.
As part of the settlement agreement with the SEC, the Business Journal reported, Molina will disgorge his ill-gotten gains and pay a penalty of $39,230, which is one-half the disgorgement amount, court records show.