FINRA Nails Illinois Broker For Insider Trading
In an announcement by the Financial Industry Regulatory Authority (FINRA), Michael Hendry has been barred from the securities industry for engaging in insider trading and failing to respond truthfully to inquiries from FINRA’s Office of Fraud Detection and Market Intelligence (OFDMI). In addition to being barred from the industry, Mr. Hendry was fined almost $70,000, which represents the illicit profits he garnered from the insider trading.
Hendry had been a divisional vice president of Pacific Select Distributors, Inc. during the time from November 2005 and September 2010. It was during that time span when he purchased shares of Boots & Coots, Inc. (WEL), based on insider information that another company was going to acquire the company. On February 25th and 26th and March 11th and 17th, 2010, Hendry bought 73,000 shares of WEL at $1.73 to $2.16 per share. Later, on April 9, 2010, the company announced that it was being bought out by Halliburton for $3.00 per share in a transaction worth $204.4 million. After the announcement, WEL’s stock jumped $0.67 (25%) to $2.95 a share. Hendry sold his 73,000 shares between $2.94 and $3.00 per share, generating a profit of $69,955.
FINRA investigators found that Mr. Hendry bought the shares of Boots & Coots (WEL), while having non-public information about the Halliburton buyout. Additionally, Hendry apparently lied to investigators, in violation of FINRA Rule 8210, raising the ire and intensity of the investigation.