SEC: Tip at Super Bowl Led to Insider Trading

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While many people remember the 2011 Super Bowl as the year Aaron Rodgers helped the Green Bay Packers win a title, three L.A. men could end up remembering it for a much more ominous reason.

Marc Winters, a broker at downtown L.A.’s Wedbush Securities Inc.; Robert Munakash, owner of three Southern California gas stations, including a 76 station in Pacific Palisades and an Arco location in Santa Monica; and Carlos Rodriguez, general manager of the gas stations, were accused of insider trading by the Securities and Exchange Commission in a federal lawsuit filed last week in California’s Central District.

Regulators said Munakash, 47, learned at the Super Bowl that former online marketing firm GSI Commerce Inc. of King of Prussia, Penn., was in acquisition talks with private equity firms and eBay Inc. He allegedly gathered that information from a close friend who worked at GSI and attended the game with him in Dallas.

Munakash is accused of tipping off Winters, his broker, and Rodriguez that the marketing firm would be closing a deal soon.

All three men went on to purchase more than $600,000 of GSI stock, according to the filing. About a month after the Super Bowl, eBay announced its acquisition of GSI for $2.4 billion, or about $30 a share.

That caused GSI’s share price to jump by more than $9 a share – a 50 percent increase over the previous day’s closing price, the SEC alleges.

Munakash quickly sold his shares as well as those he held in his parents’ account for a profit of more than $178,000, the complaint says.

Winters, 60, allegedly sold his shares for a profit of $4,100 as well as shares held in two discretionary client accounts for more than $26,000.

Winters was fired from New York firm UBS in 2004 after failing to provide accurate customer information relating to mutual fund sales, according to the Financial Industry Regulatory Authority.

Rodriguez, 33, is accused of selling all of his holdings for more than $17,000 in profit.

The men did not respond to a request for comment.

EBay sold GSI, which had been renamed eBay Enterprise Inc., last year to a group of investors including private equity firms for $925 million.

If a judge rules in favor of the SEC, it is possible that Winters could be barred for a specified time period, but only if the commission decides to pursue an administrative proceeding after the suit, according to the SEC.

For now, regulators are seeking a permanent injunction against the men as well as payment of civil penalties and trading profits.

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