SEC Files Complaint Against World Fuel Executive and Others for Insider Trading

SEC v. Steven Scoppetuolo, et al., Civil Action No. 1:10-CV-20475 (S.D. Fla.)

The Securities and Exchange Commission (“Commission”) filed a complaint today in the United States District Court for the Southern District of Florida against Steven Scoppetuolo, Robert S. Tocci, Sarang Ahuja, Richard White, and Eric M. Gordon, alleging that they engaged in illegal insider trading from which they reaped a total of more than $1 million in profits.

The SEC’s complaint concerns two separate groups of traders who the SEC alleges illegally traded in the securities of World Fuel Services Corporation prior to two worse than expected earnings announcements by the company in May and August 2007. The complaint alleges that Scoppetuolo, a World Fuel executive, tipped his best friend, Tocci, the company’s former Chief Financial Officer, about material, non-public information related to its earnings. The complaint alleges that Tocci then used that information to purchase put options in World Fuel and to sell and short its stock before both earnings announcements. Tocci made a profit of about $262,000 and avoided a loss of $34,000 from his illegal trading. The complaint also alleges that Scoppetuolo or Tocci tipped their securities broker, Ahuja, about World Fuel’s earnings, who then also purchased put options and sold short stock in his personal and other customer accounts before both earnings announcements. Ahuja and his customers made a profit of about $170,000 from his illegal trading.

The complaint also alleges that White, World Fuel’s Vice President of Tax, sold short stock before both earnings announcements, while in possession of material, non-public information about its earnings. The complaint further alleges that White unlawfully tipped Gordon about World Fuel’s non-public earnings, who used the information to buy put options prior to both earnings announcements. Moreover, the complaint alleges that Gordon tipped two of his friends, who also bought put options in World Fuel. Gordon and his friends made a profit of about $659,000 from their illegal trading.

The SEC alleges that Scoppetuolo, Tocci, and White violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and that Ahuja and Gordon violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The complaint seeks a judgment against all defendants providing for injunctions, disgorgement of their ill-gotten gains with prejudgment interest, and civil money penalties. The complaint also seeks an order prohibiting Scoppetuolo from serving as an officer or director of a public company.

The Commission thanks the Options Regulatory Surveillance Authority for its assistance in this matter.

See Compliant: http://sec.gov/litigation/complaints/2010/comp21415.pdf