Litigation Releases (Alfred V. Tobia, Jr. and Elizabeth Lee)

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26218 / January 13, 2025

Securities and Exchange Commission v. Alfred V. Tobia, Jr. and Elizabeth Lee,

No. 1:25-civ-00280 (S.D.N.Y. filed Jan. 13, 2025)

SEC Charges Former Public Company Officer and His Sister-In-Law with Insider Trading

On January 13, 2025, the Securities and Exchange Commission charged Alfred V. Tobia, Jr., the former president and chief investment officer (CIO) of one public company and a member of the board of another, and his sister-in-law, Elizabeth Lee, with insider trading that resulted in more than $428,000 in illegal profits. The defendants have agreed to pay more than $1.36 million to settle the charges.

According to the SEC's complaint, Tobia allegedly breached his fiduciary duty as president and CIO of the public company by tipping Lee in the Summer of 2021 about his company's plan to make an offer to acquire all of the outstanding shares of Spok Holdings Inc., after which Lee promptly placed trades to purchase Spok stock. When Tobia's company later issued a press release announcing the offer, Spok's stock price increased by approximately 26 percent. Within two days, Lee allegedly sold all of the Spok shares she had purchased, generating illicit profits of more than $262,000. In addition, while serving as a member of the board of the other public company, Tobia allegedly learned material nonpublic information about PFSWeb, Inc.'s sale of one of its business units known as LiveArea. Tobia allegedly tipped the information to Lee, who purchased 60,000 shares of PFSWeb and sold those shares once the LiveArea transaction was announced. As a result, Lee made more than $166,000 in profit.

The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, charges Tobia and Lee with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations in the SEC's complaint, which was filed in the U.S. District Court for the Southern District of New York, Tobia and Lee have both agreed to settle the SEC's charges. In addition to agreeing to permanent injunctive relief, Tobia has agreed to be barred from serving as an officer or director of a public company for five years and to pay a civil penalty of $785,020. In addition, Lee has agreed to pay a civil penalty of $576,955. The settlements are subject to court approval.

The investigation of this matter was conducted by Mariel Bronen, Kiran Patel, Oren Gleich, Elizabeth Baier, George O'Kane, and George N. Stepaniuk of the SEC's New York Regional Office and was supervised by Ms. Shah. The SEC wishes to thank the Financial Industry Regulatory Authority for its assistance.