Written by The Business Journal Staff
The son of a board member of Visalia’s Valley Commerce Bancorp has settled charges of insider trading levied by the federal Securities and Exchange Commission.
According to the SEC, Aaron R. Smith, a San Francisco resident, learned from his father that Valley Commerce Bancorp would be acquired by another bank. Smith understood the acquisition was sensitive information meant to be kept confidential, but in May 2016 he transferred a significant portion of his savings into a brokerage account and began purchasing the stock of Valley Commerce Bancorp, parent company of Valley Business Bank, according to the SEC.
After the Sept. 22, 2016 announcement that Ontario, California-based CVB Financial Corp. would acquire Valley Commerce Bancorp, the bank’s stock price jumped 37 percent the next day. Based on the stock price, Smith generated an unrealized gain of about $41,000, according to the SEC.
“Close family members should safeguard confidential information that they may learn from insiders at public companies,” said Jina Choi, director of the SEC’s San Francisco Regional Office. “These obligations include abstaining from trading on that inside information.”
Without admitting or denying the SEC’s findings, Smith agreed to cease and desist from further violations of federal antifraud provisions, pay back $40,578 plus $3,205 in interest and pay a $40,578 penalty.