Officials at the U.S. Department of Justice said the former Eagle, Idaho-based president and CEO of a public company has pleaded guilty to insider trading.
According to the DOJ, Michael Smith, 48, of Eagle, Idaho was the president and CEO of a public company whose shares were publicly traded on the NASDAQ. Between June 2022 and June 2024, Smith received material nonpublic information regarding the impending acquisition of his company by another company. He was at the time under the company’s Insider Trading policy, which prohibited him from trading his company’s stock because of his insider knowledge.
However, in July 2024, despite the company’s policy, Smith allegedly used a brokerage account under another person’s name to execute trades on the company. Officials with the DOJ said Smith and the other person had a close personal relationship. Smith used his inside knowledge of the pending acquisition to make the trade.
In August 2024, the company’s acquisition became public, and the company’s stock increased by nearly 50 percent. Investigators said Smith sold the stock he had purchased under the other person’s name for a profit of more than $145,000. The DOJ said Smith executed the stock trade to financially benefit the other person.
Smith pleaded guilty to one count of securities fraud and faces a maximum penalty of 20 years in prison. He will face sentencing at a later date, officials with the DOJ said.
The investigation into Smith’s actions was announced by Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division; U.S. Attorney Bart M. Davis for the District of Idaho; and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service Criminal Investigations Group (USPIS-CI).