Justin Samuel Cary


Litigation Release No. 23940 / September 21, 2017

Securities and Exchange Commission v. Justin Samuel Cary, No. 17-CV-01649 (C.D. Cal. filed Sept. 21, 2017)

SEC Charges CPA with Insider Trading Ahead of Acquisition Offer

The Securities and Exchange Commission today charged a California-based Certified Public Accountant with insider trading ahead of an acquisition offer for an advertising technology company.

According to the SEC’s complaint, on January 28, 2016, Justin Samuel Cary, an accounting consultant for Adaptive Medias, Inc., received an email from the company’s controller quoting the headline of a yet-to-be-issued press release announcing that the company had received an acquisition offer of $1.50 per share, at a time when its stock was trading for only $0.16 per share. The SEC further alleges that, while composing a response to the controller, Cary logged on to his personal online brokerage account just six minutes after receiving the email and purchased 18,500 shares of Adaptive Medias stock. The complaint alleges that, four days later, Adaptive Medias announced the acquisition offer and, following the announcement, Adaptive Media’s share price increased 428% over the prior day, closing at $0.74 per share. According to the SEC, Cary sold all of his shares and generated $8,140.25 in illicit profits.

The SEC’s complaint, filed in federal court in the Central District of California, Southern Division, charges Cary with violating Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, disgorgement of ill-gotten gains plus interest, a civil penalty, and an officer-and-director bar.

The SEC’s investigation was conducted by Todd Brilliant, and supervised by Marc Blau. The SEC’s litigation will be led by Gary Y. Leung.

 SEC Complaint