The United States Securities and Exchange Commission (SEC) has informed the New York Southern District Court that it has reached a proposed settlement with one of the defendants in a lawsuit concerning an international insider trading scheme.

A document filed by the SEC on November 18, 2021 and seen by FX News Group reveals that the Commission and Dov Malnik have reached a proposed settlement. Malnik has agreed to be enjoined against future violations of the antifraud provisions of the securities laws, and to pay a $2,828,699 civil penalty.

Let’s recall that, in March 2020, the SEC charged two traders – Tomer Feingold and Dov Malnik, in connection with a long running international insider trading scheme. The traders allegedly generated profits of more than $4 million trading in the securities of U.S. public companies in advance of news that these companies had been targeted for acquisition.

According to the SEC’s complaint, Feingold and Malnik, both Israeli citizens who reside in Switzerland, participated in an international insider trading scheme between 2013 and 2015. The complaint alleges that Feingold and Malnik indirectly obtained nonpublic information about impending corporate transactions from Benjamin Taylor and Darina Windsor, London-based investment bankers, both of whom the SEC charged in October 2019.

Feingold and Malnik allegedly used the information to net over $4 million in illicit profits trading the securities of at least seven different companies through their individual accounts and through brokerage accounts in the names of entities that they controlled.

The SEC’s complaint charges Feingold and Malnik with violations of the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder.

In line with the proposed settlement with the SEC, Malnik has executed a declaration regarding Amiservice Development Limited, Ample Vantage Trading Limited, Kuray Investments Limited, and Mignon Group Limited, reflecting his agreement to transfer all assets frozen at Interactive Brokers in his name and in the names of those relief defendants to the Commission in partial satisfaction of the civil penalty.

Among other things, the Judgment: (1) permanently enjoins Malnik from committing additional violations of the federal securities laws the Commission charged him with violating, including an injunction against engaging in fraud in connection with the purchase or sale of any security; and (2) imposes a civil penalty of $2,828,699, pursuant to 15 U.S.C. § 78u-1.