The Securities and Exchange Commission (SEC) has announced a settlement with former financial services executive Joseph Conlan over insider trading allegations. The charges relate to Conlan's trading in GAIN Capital Holdings, Inc. (GCAP) stocks ahead of a public announcement that StoneX Financial would acquire the company.

As part of the settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term, Conlan is required to pay disgorgement of his ill-gotten gains, along with prejudgment interest and a civil penalty totaling $159,389.

Conlan Settles GAIN Capital Insider Trading Charges with SEC

Conlan, who was previously the Global Head of FX Sales at StoneX Financial (formerly known as INTL FCStone, Inc.), came under scrutiny for trading GCAP stocks based on nonpublic information. He learned about the upcoming acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term from a close friend and former colleague still employed at StoneX. Consequently, Conlan purchased GCAP stocks, which later surged by the acquisition announcement, netting him a profit of $73,627.47.

In response to the acquisition news that emerged at the end of February 2020, GCP's stock price surged by 66% in the opening session, rebounding from historical lows.

The SEC's investigation revealed that Conlan violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Without admitting or denying the allegations, he agreed to a cease-and-desist order.

"Conlan agreed to settle the charges by consenting to a cease-and-desist order, a bar from serving as an officer or director of a public company for a period of five years, and an order to pay disgorgement of $73,627.47, prejudgment interest of $12,134.41, and a civil penalty of $73,627.47," the SEC commented in the official statement.

The SEC's Enforcement Division's Market Abuse Unit, led by Derek M. Schoenmann and Lindsay Moilanen, conducted the investigation.

$236 Million Purchase

The $236 million acquisition of GAIN Capital by StoneX Financial was finalized in July 2020 despite initial resistance from many of GAIN's shareholders. Ultimately, the deal secured 71% shareholder approval and was executed as an all-cash transaction at $6 per share. StoneX's CEO, Sean O'Connor, highlighted in a 2020 interview that the acquisition made financial sense and added valuable intellectual assets to the group.

After the acquisition, StoneX reported an $81.8 million bargain purchase gain in its Q3 2020 financial report, indicating a boost in operating revenue and income.

By March 2021, StoneX began the process of phasing out its FX business under the GAIN Capital brand in the UK. This move was part of a broader strategy to restructure and integrate GAIN into StoneX, thereby reallocating capital more efficiently.