Trading on insider information never, ever ends well — especially if you’re an attorney.
William Gericke, 61, a longtime lawyer at Cozen O’Connor before this incident, was recently suspended from practice for one year’s time in Pennsylvania following his buying of stock in a firm client’s company before a merger was announced. Law360 (sub. req.) has additional details:
The underlying case began in October 2019, when another partner at Cozen O’Connor asked Gericke to run a conflict check on a potential merger between Liberty Property Trust, a client, and Prologis Inc., a real estate investment trust. News of a possible merger had not been made public at the time.
Gericke purchased 10,000 shares of stock at $51 per share in Liberty Property Trust the next day and did not inform Cozen O’Connor management of the transaction, the report says. About 20 days later, the merger between Prologis and Liberty Property Trust was formally announced, and Liberty Property Trust’s stock price rose on the announcement. Gericke sold his shares for $61 per share and made a $10,000 profit, according to the disciplinary board’s report.
For the next several months, the Financial Industry Regulatory Authority investigated trading activity surrounding the merger announcement. The inquiry soon reached the SEC, which then subpoenaed Gericke in July 2021. A few weeks later, Gericke resigned from Cozen O’Connor and admitted in August 2021 that his purchase of Liberty Property Trust stock was illegal insider trading.
Gericke co-founded Cozen’s conflicts department in 2018 and its legal profession services group in 2020, which, per the disciplinary board, made him “especially qualified” when it came to recognizing potential ethics violations and conflicts of interest. Too bad he didn’t recognize them in his own actions.
The Securities and Exchange Commission permanently barred Gericke from practicing before it and ordered him to pay a $20,000 fine. Although he is now employed at Dugan Brinkmann Maginnis & Pace, per the ABA Journal, he is not listed on the firm’s website. His suspension from practice takes effect April 19.
Ex-Cozen Atty Gets 1-Year Suspension For Insider Trading [Law360 (sub. req.)]
Former BigLaw attorney gets 1-year suspension for trading on information learned as conflicts counsel [ABA Journal]
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.
