Risk & Compliance

Profits Are Shipwrecked!

The discoverer of a sunken 18th century vessel worth $500 million settles SEC insider-trading charges related to the find.
Stephen TaubJanuary 18, 2008

A prominent oceanographer credited with the most lucrative discovery of a shipwreck settled insider-trading charges on Thursday with the Securities and Exchange Commission.

Ernesto Tapanes, a consultant with Odyssey Marine Exploration, was accused of illegally making $107,000 by buying shares of the company shortly before it announced its discovery of the Black Swan shipwreck, valued at more than $500 million, and then selling the stock shortly after the public announcement of the find. He agreed to disgorge $107,101.92, plus prejudgment interest of $2,151.56, and pay a civil penalty of $107,101.92.

The initial discovery that there was some sort of anomaly on the ocean floor took place on March 30, 2007, off the coast of Gibraltar. Within days, Odyssey Marine confirmed that the anomaly was an 18th century shipwreck, code-named the Black Swan. By April 11, the Odyssey Explorer had excavated more than 17 tons of coins and other artifacts from the site. The recovery constituted the largest collection of coins ever excavated from a historical shipwreck site.

Shortly afterward, Tapanes and others signed a confidentiality agreement to keep the find confidential and not to trade in Odyssey Marine stock, according to the SEC’s complaint. But he did buy the stock and sold it after the discovery was announced on May 18, according to the complaint.