Risk & Compliance

Midlevel Insider-Trading Case Settled

Finance manager at retailer Williams-Sonoma who pocketed almost $70,000 agrees to pay back twice that much.
Stephen TaubJune 20, 2008

A former Williams-Sonoma Inc. finance manager has settled civil charges that he traded the company’s stock ahead of its report of bad news.

Adrian Di Vita, who was a financial planning and analysis manager for the specialty retailer, agreed to pay $76,932.80 in disgorgement of illegally earned gains and a civil penalty of $67,690. He did not admit or deny the allegations in the Securities and Exchange Commission’s complaint.

The SEC said Di Vita attended meetings with senior management where he received material nonpublic information that let him know Williams-Sonoma would lower its earnings guidance for fiscal-year and third-quarter 2006 when it issued a scheduled earnings press release on August 24, 2006. Before issuance of the press release, Di Vita used that information to sell all 707 of his Williams-Sonoma Stock Fund units; he also purchased 1,000 put option contracts on the company’s stock. After the retailer issued its press release, its stock price fell by more than 8 percent, and Di Vita sold his put options. As a result, he avoided losses and had profits totaling $67,690.