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A former employee of a Pasadena business agreed Wednesday to plead guilty to insider trading for using nonpublic information to make nearly $500,000 by selling shares in the company after news of a forthcoming acquisition became public.
Marco Antonio “Marc” Perez, 59, of Glendora, is charged with one count of insider trading, a felony that carries a possible sentence of up to 20 years in federal prison, according to the U.S. Department of Justice.
Both the document charging Perez and his plea agreement were filed Wednesday in Los Angeles federal court. Perez has been ordered to make his initial court appearance on Oct. 5.
According to the plea agreement, General Finance Corp., a Pasadena-based storage and modular space company, employed Perez as an accounting manager who reported to the company’s chief financial officer. He also performed assignments for the company’s chairman, including printing out the chairman’s emails.
As a result, Perez had access to material information belonging to General Finance, including offers to buy the company, before the information was released to the investing public, the Justice Department said.
In violation of his fiduciary duties to General Finance and its shareholders, and in violation of company policy against insider trading, in March and April of 2021, Perez purchased a total of 66,585 shares of General Finance stock that he was later able to sell for a total of $1.26 million, according to prosecutors.
Perez purchased the General Finance stock after reading confidential emails sent to the company’s chairman in early 2021 that concerned the pending sale of General Finance for a price in the range of $19-$20 per share. Perez paid prices between $10 and $12 for the 66,585 shares he bought, the Justice Department stated.
General Finance was ultimately sold to the Stamford, Connecticut-based United Rentals Inc. On April 15, 2021, United Rentals issued a news release announcing that it was acquiring General Finance for $19 per share. Prior to this announcement, General Finance’s share price closed that day at $12.17. The day after United Rentals’ announcement, the price of General Finance shares surged from $12.17 — the closing price before the announcement — to $19 per share, court papers show.
Within two weeks of the announcement, Perez sold all 66,585 shares he had purchased on inside information, netting a profit of about $488,533, according to the plea agreement.
In his agreement, Perez also admitted to tipping off two people about the impending sale of General Finance, which also violated General Finance’s policy against insider trading. Both individuals acted on Perez’s inside information and made profits of $127,140 and $34,867, respectively.
The U.S. Securities and Exchange Commission announced civil charges against Perez on Wednesday stemming from his illegal trading activity.
