The Securities and Exchange Commission (SEC) charged David Riley, the former chief information officer at Foundry Networks, and Matthew Teeple, a former hedge fund investor, with insider trading.
The SEC alleges that David Riley tipped off Matthew Teeple in advance of a July 2008 announcement that Foundry Networks Inc. had agreed to be acquired by Brocade Communication Systems for approximately $3 billion. Teeple used the tip to buy Foundry shares in large quantities in the days leading up to the public announcement, and the hedge funds managed by the firm reaped millions of dollars in profits when Foundry’s stock value increased upon the news. The SEC claims that Teeple also shared this information with others at his firm who also benefitted from the insider information.
The U.S. Attorney’s Office for the Southern District of New York has also filed criminal charges against Teeple, Riley, and another associate.
