SEC alleges Carter traded company shares ahead of earnings announcements through wife’s accounts
The SEC is suing the former Carter’s vice president of IR over allegations that he improperly profited from dozens of illegal trades during the last three of his seven years with the children’s clothing manufacturer.
Eric Martin, the Roswell, Georgia, resident who served as director and then vice president of investor relations at Carter’s between 2003 and 2009, is accused of avoiding losses or benefiting from profits totaling $170,000, trading through the accounts of his wife, Robin Martin, according to an SEC litigation release.
Martin ‘repeatedly traded Carter’s shares during blackout periods while in possession of material, nonpublic information regarding the company’s financial results,’ the SEC writes.
‘According to the complaint, Martin obtained Carter’s preliminary financial results while preparing Carter’s senior management for Carter’s quarterly earnings calls, and then bought or sold Carter’s stock depending on whether the preliminary information here received was positive or negative.’
The SEC complaint, filed in the US District Court in the Northern District of the state of Georgia, charges the 42-year-old former executive with ‘violating the antifraud provisions of the federal securities laws during at least eight quarters between January 2007 and April 2009 in advance of the company’s quarterly earnings releases.’
‘The commission seeks a permanent injunction, disgorgement with prejudgment interest and civil monetary penalties Act against defendant Martin and seeks disgorgement with prejudgment interest from his wife, relief defendant Robin Martin, for trading Martin did through her accounts,’ the release says.
After leaving Carter’s, the maker of the OshKosh B’Gosh and Carter’s brands of children’s clothing, Martin joined hedge fund MA Capital Management in April 2009 as portfolio manager and managing director, according to his LinkedIn page.
Prior to Carter’s, Martin served as director of IR at Premiere Global Services, a company that specializes in technologies to facilitate corporate meetings.
The announcement comes five months after the FBI indicted 62-year-old Joseph Pacifico, the former Carter’s president, for ‘securities fraud, causing the filing of false financial statements, and falsifying the books and records of a public company’, according to an FBI statement.
An indictment also charged Pacifico and chief executive Joseph Elles, 57, with ‘37 federal crimes relating to their alleged roles in accounting irregularities at the major children’s clothing company Carter’s’.
‘Joseph Pacifico, the former number two executive at Carter’s, based in Atlanta, is accused of trying to hide a multi-million-dollar fraud, lying to shareholders and committing additional crimes in the course of the attempted cover-up,’ US attorney Sally Yates said of the case after the May 20 indictment. ‘Shareholders expect and deserve far more from their corporate leaders.’
