SEC settles with former PayPal employee over Xoom call options trading
The SEC’s complaint alleged that Bryan B. Long bought speculative call options on Xoom stock based on nonpublic information about PayPal’s planned acquisition of Xoom.
The United States Securities and Exchange Commission (SEC) has earlier today announced that it has accepted a settlement offer by Bryan B. Long, a former Director of SEC Reporting at eBay, Inc. and PayPal Holdings Inc (NASDAQ:PYPL).
Mr Long consents to the entry of an Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions.
Mr Long has been a certified public accountant licensed to practice in the State of Virginia. He was the Director of SEC Reporting at eBay, Inc. from October 2013 to July 2015, and then at PayPal Holdings Inc (NASDAQ:PYPL) from July 2015 to December 2015. Prior to his employment at eBay and PayPal, Long worked for ten years at a prominent accounting and auditing firm in a variety of roles related to auditing.
Xoom Corporation was a Delaware corporation headquartered in San Francisco, California that provided international money transfer and remittances across a number of cross-border corridors. On July 1, 2015, PayPal and Xoom jointly announced that PayPal would acquire Xoom for approximately $890 million net of cash. On November 12, 2015, PayPal’s acquisition of Xoom closed.
On September 28, 2018, the SEC filed a complaint against Mr Long. The Commission’s complaint alleged, inter alia, that Long bought speculative call options on Xoom stock based on material nonpublic information about PayPal’s planned acquisition of Xoom that he learned in advance of the announcement of the deal.
The complaint says that Mr Long first purchased over $10,500 of Xoom call options on May 20, 2015, within five days of PayPal making its initial offer to acquire Xoom. The complaint alleged that after Long received information that a deal could be announced in early July, he made a second purchase of another $5,000 of Xoom call options on June 22, 2015, which were set to expire less than thirty days after his purchase. After the market closed on July 1, 2015, PayPal’s acquisition of Xoom was made public. The next morning, Xoom stock opened trading at $25.50 per share, a 52-week high, and Mr Long sold all of his Xoom options, reaping $35,842.49 in profits.
Under the settlement announced today, Mr Long is suspended from appearing or practicing before the Commission as an accountant.
After three years from the date of this order, he may request that the SEC consider his reinstatement by submitting an application to resume appearing or practicing before the Commission as a preparer or reviewer, or a person responsible for the preparation or review, of any public company’s financial statements that are filed with the Commission, or as an independent accountant.