Two Charged With Insider Trading of Herbalife Stock

SEC charges 2 with insider trading in Herbalife shares 1:09

The Securities and Exchange Commission charged two men Tuesday with insider trading in connection with Pershing Square's announcement that it had taken a short position on Herbalife. The SEC said Filip Szymik of New York learned from his roommate, who was a Pershing analyst, of William Ackman's planned announcement on Dec. 20, 2012, that he was shorting Herbalife stock because of his claim that its operations amounted to a pyramid scheme. Szymik, 28, then allegedly told Jordan Peixoto of the news. Peixoto, 30, of Toronto, in turn allegedly made $47,100 off of Herbalife put options, the agency said.

The SEC said it settled with Szymik, ordering him to cease and desist from further violations and pay a $47,100 civil penalty. Peixoto's attorney, Derrelle Janey, told CNBC that the charge "is another instance of the SEC going too far and penalizing someone for conduct that is not a violation of the law." The former Pershing analyst who leaked the news left the firm in September 2013, according to the SEC order against Szymik.