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(Reuters) – A former Silicon Valley Bank executive has agreed to plead guilty to securities fraud for tipping a friend ahead of private equity transactions he learned about at the bank in 2015 and 2016.
Federal prosecutors in San Francisco said on Wednesday that former vice president Mounir Gad, 34, will plead guilty to two counts of securities fraud in the insider trading case. His friend who traded, Nathan Guido, 38, has entered a deferred prosecution agreement.
Jared Kopel of Alto Litigation, who represents Gad, declined to comment. Caz Hashemi of Wilson Sonsini Goodrich & Rosati, who represents Guido, did not immediately respond to a request for comment.
The two men also settled with the U.S. Securities and Exchange Commission with Gad agreeing to pay a penalty of $51,700, which equals the profits the agency said were generated by the trades.
Guido, who cooperated with the SEC, agreed to pay $40,700 penalty, which was the amount the SEC says he kept after passing a portion to Gad.
Gad had worked at the bank since 2008 and was part of a division that handled private equity clients, according to the settlement.
The SEC said he tipped Guido to Francisco Partners’ acquisition of network equipment provider Procera Networks Inc in 2015.
The following year, Gad urged his friend to buy shares of IT company Imprivata Inc and digital advertiser Sizmek Inc, according to the SEC. The companies were acquired after that by Thoma Bravo and Vector Capital, respectively.
Erin Schneider, director of the SEC’s San Francisco Regional Office, said Gad betrayed clients’ trust by allegedly sharing the non-public information.
The case is U.S. v. Gad, U.S. District Court, Northern District of California, No. 21-cr-261, and the administrative proceeding is In the matter of Mounir N. Gad, U.S. Securities and Exchange Commission, No. 3-20382.For Gad: Jared Kopel of Alto LitigationFor Guido: Caz Hashemi of Wilson Sonsini Goodrich & RosatiFor the SEC: Robert Durham Jr.For the government: Sarah Griswold and Jessica Leung
