WELLINGTON, Fla. — A Wellington man agreed to a civil penalty of more than $1 million, three times his unlawful insider trader profits, to settle charges by the Securities and Exchange Commission on Wednesday.
Charles Rustin Holzer, 54, has been described as as a "serial insider trader whose conduct merits the stiffest penalties available to the Commission,” Gurbir S. Grewal, director of the SEC’s of the Division of Enforcement said in a news release. “In this case, a fine equal to three times his illicit trading profits sends a strong deterrent message not just to Mr. Holzer, but also to others who may contemplate engaging in such conduct.”
Holzer, without admitting or denying the allegations, agreed to settle the SEC’s charges by consenting to final judgment permanently enjoining him from violating the charged provisions of the securities laws and ordering him to pay the civil penalty of $1,173,926.
Holzer, who is principal and chairman of family-owned Worth Capital Holdings, last year settled SEC charges that he traded in options of Dun & Bradstreet Corp. on inside information. Holzer settled that case, without admitting to or denying the regulator’s allegations, agreeing to pay $869,000 in penalties and disgorgement.
The SEC’s latest complaint alleges that Holzer also placed unlawful trades in DNB stock through offshore accounts not disclosed to the SEC in connection with the prior investigation and settlement.
Nine days before acquisition announcement on Aug. 8, 2018, Holzer learned material nonpublic information about the prospective DNB acquisition from an investment adviser pursuant to a non-disclosure agreement that prohibited him from disclosing or trading on the information.
The SEC alleges that Holzer used that information to purchase 23,000 shares of DNB stock in offshore accounts belonging to two Cayman Islands-based entities that Holzer directly or indirectly controlled, Maglione International Ltd. and Frontenac Investments Ltd., resulting in $391,308 in ill-gotten profits.
Those trades took place at roughly the same time as the options trades at issue in the prior lawsuit, according to the SEC’s complaint, but he Holzer did not disclose the offshore trading to the SEC.
The SEC’s complaint, filed in the Southern District of New York, charges Holzer with violating the antifraud provisions of the federal securities laws.
Maglione and Frontenac, without admitting or denying the SEC’s allegations, have consented to the entry of final judgments ordering that they pay disgorgement of $331,389 and $59,920, respectively, representing the amount of profits from Holzer’s DNB trading in their respective accounts, plus prejudgment interest of $84,032 (for Maglione) and $15,194 (for Frontenac).
The proposed settlements are subject to court approval.
He is the son of Palm Beach businesswoman and art collector Jane Holzer, who in the 1960s was known as “Baby Jane” Holzer and starred in avant-garde films made by her friend, the late Andy Warhol, the Palm Beach Daily News reported.
Holzer participated in the 1992 O;ympics as an equestrian for U.S. Virgin Islands.