The SEC charged a cloud executive with insider trading after he allegedly saved his brothers from $600,000 in losses
- The SEC charged a former cloud security executive with insider trading on Thursday.
- Amer Deeba, chief commercial officer at Qualys, allegedly gave his two brothers advanced warning of poor financial results in Q1 2015 and encouraged them to sell all of their shares in the company.
- The financial results ultimately tanked the company's stock 25% the day after earnings, and saved the brothers a total of $581,170, according to the SEC complaint.
A longtime enterprise tech executive was charged with insider trading on Thursday by the Securities and Exchange Commission which alleged that he tipped off his two of his brothers and helped them dump shares in his company ahead of an ugly quarterly earnings report.
Amer Deeba, the defendant, worked at Qualys for 17 years, most recently as chief commercial officer of the cloud security and services company. He had special access to Qualys CEO Philippe Courtot, according to the complaint, and was the only senior executive to sit near Courtot in the office.
The SEC alleges that Deeba was privy to a significant miss on revenue in the company's Q1 2015 quarter, and encouraged his brothers to sell of their shares on that information before the company announced its results.
Deeba, who has settled the case without admitting or denying the allegations, will be barred for two years from serving as an executive or director at any SEC-reporting company and will pay a penalty of $581,170 - the amount of losses his tip allegedly saved his brothers.
Courtot called Deeba on April 7 and informed him of the low sales figures, according to the complaint. Deeba, who was in Lebanon with his family at the time of the phone call, allegedly passed this information along to his two brothers. Each held shares in the company thanks to gifts Deeba had issued them in 2005, long before the company's 2012 IPO.
Qualys's stock price dropped 25% the day following its May 4 earnings announcement, according to the SEC complaint.
Because they sold their stock ahead of the news, Deeba's two brothers avoided losing a total of $581,170, according to the complaint. Deeba and Qualys could not immediately be reached for comment.