LOS ANGELES
A former employee at a publicly traded Pasadena-based company has agreed to plead guilty to buying more than 66,000 company shares based on non-public information that the company was about to be acquired at a higher per-share price, officials stated.
Then, Marco Antonio Perez sold the shares after news of the acquisition became public, resulting in nearly $500,000 in ill-gotten gains, the Justice Department announced Wednesday.
Perez, 59, a.k.a. “Marc Perez,” of Glendora, is guilty of one count of insider trading, a felony. He faces up to 20 years in federal prison when he is sentenced on Oct. 5.
According to the plea agreement, General Finance Corp., a Pasadena-based storage and modular space company, employed Perez as an accounting manager who reported to the company’s chief financial officer.
He also performed assignments for the company’s chairman, including printing out the chairman’s emails.
As a result, Perez had access to material information belonging to General Finance, including offers to buy the company, before the information was released to the investing public.
Perez acquired a total of 66,585 shares of General Finance stock between March and April 2021, which he was subsequently able to sell for a total of $1,262,815 in violation of his fiduciary duty to General Finance and its shareholders as well as the business’s policy against insider trading.
After receiving private letters addressed to the company’s chairman in early 2021 on the impending sale of General Finance for a price in the range of $19-$20 per share, Perez decided to buy the General Finance stock.
Perez purchased 66,585 shares at prices ranging from $10 to $12.
General Finance was ultimately sold to the Stamford, Connecticut-based United Rentals Inc.
On April 15, 2021, United Rentals issued a press release announcing that it was acquiring General Finance for $19 per share.
Before to this announcement, General Finance’s share price closed that day at $12.17. The day after United Rentals’ announcement, the price of General Finance shares surged from $12.17 – the closing price before the announcement – to $19 per share.
Within two weeks of the announcement, Perez sold all 66,585 shares he had purchased on inside information, netting a profit of approximately $488,533.
In his plea agreement, Perez also admitted to tipping off two people about the impending sale of General Finance, which also violated General Finance’s policy against insider trading.
Both individuals acted on Perez’s inside information and made profits of $127,140 and $34,867, respectively.
Wednesday, the United States Securities and Exchange Commission announced civil charges against Perez stemming from his illegal activity in this case.
The FBI investigated this matter.
Assistant U.S. Attorneys Ranee A. Katzenstein and Steven M. Arkow of the Major Frauds Section are prosecuting this case.