Settlement reached in Cooper-Apollo alleged insider trader case

WASHINGTON (Nov. 18, 2015) — Steven C. Watson, a Lynnfield, Mass., man who allegedly engaged in insider trading based on information about the abortive acquisition of Cooper Tire and Rubber Co. by Apollo Tyres Ltd., has settled with the U.S. Securities and Exchange Commission (SEC).

The SEC filed the settlement agreement with the U.S. District Court for the District of Massachusetts Nov. 17.

According to the document, Mr. Watson received confidential information about the Cooper-Apollo deal from Amit Kanodia, an entrepreneur and private equity investor based in Brookline, Mass. Mr. Kanodia had received the information from his wife, then Apollo's general counsel, who was intimately involved in the negotiations between Apollo and Cooper.

Mr. Watson obtained almost $170,000 from trading in Cooper stock based on this information and, according to the court filing, paid a kickback to Mr. Kanodia through a bank account held in the name of a supposed charity that Kanodia controlled.

The SEC seeks:

• A permanent injunction against Mr. Watson for any acts of insider trading;
• Surrender of all the money he obtained through insider trading, plus pre-judgment interest; and
• Payment of all civil penalties required by SEC regulation.

The agreement is subject to the approval of Judge Allison D. Burroughs of the Massachusetts court.

In April 2015, the SEC brought fraud charges in Connecticut federal district court against Mr. Kanodia and venture capitalist Iftkar Ahmed in connection with insider trading in the Cooper-Apollo deal. That case is still pending.