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Washington, D.C. - The SEC has secured a final judgment against David Schottenstein, 39, of Surfside, Florida, who was implicated, convicted, and sentenced for an insider trading scheme centered on three corporate announcements between 2017 & 2018.

Key Points

• According to the SEC's complaint, the insider information was related to a 2017 DSW Inc. earnings announcement, a 2018 tender offer to acquire Aphria Inc., and a 2018 merger agreement between Albertsons Companies, Inc. and Rite Aid.
• Schottenstein obtained the information from his cousin, who served on the board of directors of both DSW and the company that attempted to acquire Aphria, and whose family owned a business involved in the Rite Aid transaction.
• Schottenstein used this information to trade in advance of these announcements, gaining $4.5 million in profits from these trades. He also tipped two friends, who traded ahead of these announcements.
• Schottenstein consented to a judgment ordering him to pay a disgorgement of $536,752.90 and prejudgment interest of $67,933.16.
• However, the financial penalties are satisfied by the forfeiture order in a parallel criminal case where Schottenstein pleaded guilty to conspiracy to commit securities fraud in February 2022. In March 2023, he was sentenced to one year and one day in prison, five years of supervised release, and ordered to forfeit $634,893.