Dive Brief:
- The U.S. Securities and Exchange Commission charged Frank Poerio of Gibsonia, Pennsylvania, with insider trading. Poerio used nonpublic information obtained from a Dick’s Sporting Goods employee to engage in trades of the company’s securities on the New York Stock Exchange, per the SEC. Those trades resulted in over $800,000 in profit.
- The Dick’s Sporting Goods employee worked in a data analytics position at the company’s corporate offices, according to the U.S. Attorney’s Office for the Western District of Pennsylvania. Dick’s Sporting Goods did not respond to Retail Dive questions regarding the employee. Poerio was not an employee of the retailer.
- Poerio, who did not deny allegations related to the SEC’s complaint, agreed to pay a settlement subject to the court’s approval. In a separate action, the U.S Attorney’s Office for the Western District of Pennsylvania charged Poerio with four counts of securities fraud.
Dive Insight:
Poerio knew the Dick’s Sporting Goods employee, referred to as “Individual A” in court documents, prior to their time working with the retailer.
Through conversation, Poerio discovered that Individual A’s job involved access to nonpublic information concerning the retailer’s operations, including databases with the company’s sales, revenue and information regarding inventory.
Poerio asked for frequent updates on Dick’s performance, per court documents. “On some occasions, Individual A responded by telling Poerio that such information could not be disclosed,” the documents state.
However, Poerio used information to conduct trades between November 2019 and May 2021, with an uptick in actions before and after the retailer’s quarterly earnings. During November 2020, for example, Poerio conducted trades prior to Dick’s Q3 earnings announcement. Poerio and Individual A spoke on the phone more than 120 times — not including texts or in-person meetings — preceding those earnings, per court documents.
The Federal Bureau of Investigation conducted the probe that led to the prosecution of Poerio, according to the U.S. Attorney’s Office for the Western District of Pennsylvania.
Individual A was under Dick’s code of ethics and business conduct that states that employees are restricted from trading for themselves or others based on nonpublic information. “Individual A was familiar with the contents of the Code, completed annual training on it, and agreed annually via certification to follow it,” according to court documents.
Dick’s Sporting Goods did not respond to Retail Dive questions concerning Individual A’s identity, employment status or details concerning the investigation.
