Trading inside information doesn’t end well for anyone—especially if you’re an attorney with a big law firm.
Romero Cabral Da Costa Neto, 33, from Rio de Janeiro, Brazil, started working as a visiting attorney at Gibson Dunn in September 2022. Costa is accused of pulling confidential customer information from Gibson Dunn’s internal file system to close deals ahead of a major pharma M&A deal. Earlier this week he was arrested in Washington, DC and charged with insider trading. The National Law Journal has the details:
During Costa’s year as visiting attorney, he allegedly accessed confidential information about the law firm’s work on the acquisition of CTI BioPharma Corp (CTIC) by biopharmaceutical company Swedish Orphan Biovitrum AB, according to the SEC complaint. According to a press release, Gibson Dunn acted as legal counsel to CTIC on the transaction.
The SEC complaint alleges that Costa bought over 10,000 shares of CTIC the day before the deal was publicly announced, May 9, 2023, and then reportedly sold it for a profit of more than $42,000. According to the SEC, Costa was not charged with the deal for the company.
But that’s not all: According to the SEC complaint, Costa took action other obtained non-public business information from Gibson Dunn’s document management system and also allegedly traded in that information. Nicholas P. Grippo, regional director of the SEC’s Philadelphia regional office, made the following statement:
“As alleged in our complaint, Costa breached his duties to the law firm and its clients by abusing his position for personal gain. Lawyers often have access to sensitive and confidential information about their law firm’s clients. If lawyers abuse this access, as Costa allegedly did here, we will take immediate action to hold them accountable. In this case, thanks to the quick work of SEC officials, we were able to act on Costa’s alleged insider trading within months and ensure he is held accountable.”
As the NLJ noted, Gibson Dunn is cooperating with the authorities. “We are cooperating with the authorities and have ended our relationship with the person who served as an international visiting attorney for another law firm,” a spokesman for the firm said.
SEC files insider trading (SEC) charges against former attorney at US-based global law firm
Ex-lawyer at Gibson Dunn charged with insider trading (National Law Journal)
Staci Zaretsky is Senior Editor at Above the Law, where she has worked since 2011. She would like to hear from you. So feel free to email her with any tips, questions, comments or criticism. you can follow her Twitter and threads or connect with her on LinkedIn.
