'Pure Greed,' Larchmont Broker Indicted In Insider Trading Case

LARCHMONT, NY — A Westchester man has run afoul of the feds in a coordinated insider trading scheme, according to the Department of Justice.

On Wednesday, in Brooklyn federal court, an indictment was unsealed charging 38-year-old David Cooper, a broker from Larchmont, and three other traders with conspiracy to commit securities fraud and securities fraud for their participation in an insider trading scheme. They face up to 25 years in prison if convicted of the charges.

Cooper was arrested on Wednesday in Westchester and was scheduled to be arraigned Wednesday afternoon before U.S. Magistrate Judge Joseph A. Marutollo.

54-year-old Randy Grewal, of Anthem, Arizona was arrested in Arizona. 61-year-old John Lowe, a/k/a "Clams," of Sayville, and 54-year-old Richard Ringel, of Boca Raton, were both separately arrested in Florida. Grewal, Lowe and Ringel will be arraigned in the Eastern District of New York at a later date.

Judy Philips, Acting Attorney for the United States for the Eastern District of New York; William S. Walker, Special Agent in Charge, Homeland Security Investigations New York; and Brendan Donahue, Acting Inspector in Charge, United States Postal Inspection Service, New York Division, announced the arrests and charges.

"As alleged, the defendants exploited their access to inside information for years to gain an unfair advantage over the investing public for their own personal gain," Philips said. "The arrests and indictment demonstrate that this Office will protect the integrity of the securities markets and aggressively prosecute those who engage in insider trading."

She thanked the U.S. Securities and Exchange Commission, New York Regional Office, and the Financial Industry Regulatory Authority for their cooperation and assistance during the investigation.

"Those who participate in illicit trading schemes undermine our U.S. Securities and Exchange Commission laws and regulations with selfish ambition," Walker said. "HSI continues to work side-by-side with our law enforcement partners to ensure fraudsters who manipulate our legal financial systems are identified and prosecuted to the fullest extent."

According to court documents, between January 2018 and May 2024, the four men conspired to obtain material non-public information about upcoming secondary stock offerings and to trade on that information in advance of those offerings.

They illegally obtained the non-public information from several sources, including through Cooper, who worked as an employee of a broker-dealer with investment banks involved in and underwriting the secondary stock offerings, prosecutors contend.

The non-public information included specific deal information such as the identity of the public company issuing the secondary offering, the timing, the structure, and the price at which the company would offer its stock in the upcoming offering.

Cooper is accused of breaching his duty of confidentiality to the broker-dealer and misappropriating the information when he improperly gave it to Lowe, Ringel and others with the knowledge that they intended to use the information to execute short sales in advance of the public announcements of the secondary offerings.

Investigators say Lowe, Ringel and Grewal used the material non-public information to earn more than $1 million in illegal profits on their short sales before secondary offerings.

Evidence obtained from wiretaps showed that in connection with several secondary offerings between January 2023 and May 2023, Cooper and a co-conspirator obtained non-public information from investment firms that were underwriting the secondary offerings and gave the information to Lowe, Ringel and others, knowing that Lowe, Ringel and others intended to trade securities in advance of secondary offerings based on the information. Those secondary offerings included the companies Chicken Soul for the Soul Entertainment, Inc., Revelation Biosciences, Inc., and Tivic Health Systems, Inc.

"This is a case of pure greed where individuals lied, obtained information illegally, and used it solely for their own personal financial gain," Donahue said. "Postal Inspectors, along with our law enforcement partners, will continue to investigate fraud vigilantly and will protect investors from falling victim to predatory behavior."

An earlier version of this article incorrectly identified Acting Attorney for the United States for the Eastern District of New York Judy Philips as the the Acting U.S. Attorney.