Two employees at the former Bend company Clear One Health Plans have been accused of insider trading, stemming from allegations they used information in confidential emails to buy and sell company stock ahead of Clear One’s 2010 merger with PacificSource Health Plans.
The U.S. Securities and Exchange Commission filed a complaint in U.S. District Court in Eugene on Wednesday, alleging that Bend resident Daniel Vance and Hillsboro resident Blake Wellington profited after learning about Clear One’s “confidential merger negotiations,” according to the complaint.
Their attorneys could not be reached for comment, but the two neither admitted nor denied the allegations, according to a news release from the SEC. They also have agreed to pay about $150,000 combined to settle the charges, according to the release.
A settlement would end the matter if it’s approved by a U.S. District Court judge, according to SEC attorney Karen Kreuzkamp.
According to the federal complaint, Vance and Wellington worked in Clear One’s information technology department throughout 2009.
The SEC alleges that on Dec. 16, 2009, Vance was asked by the company’s CEO to troubleshoot an email problem. While working on the issue, Vance allegedly saw documents relating to the planned merger with PacificSource Health Plans, which wouldn’t be made public for another two weeks.
According to the complaint, Vance informed Wellington, his supervisor in the IT department, about the documents.
The defendants then purchased new stock in the company on Dec. 17, dipping into their 401(k) accounts and raising money through other means to buy the stock, the complaint alleges. When Clear One announced the merger on Dec. 30, 2009, the company’s stock value rose by more than 150 percent. The defendants sold their shares shortly after, according to the complaint.
The merger was finalized on May 21, 2010.
Wellington, who left the company in early May 2010, made $55,891.50, and Vance $17,509.75, through their stock sales, according to the complaint. Vance currently works for PacificSource, according to the SEC complaint.
In a proposed settlement with the government, Wellington agreed to pay $117,427 and Vance $36,788.