PITTSBURGH: A PR executive has settled US Securities and Exchange Commission charges that he improperly sold stock in 2010 before a corporate acquisition.
The SEC suit claimed that Joseph Cerenzia, former director of PR for Consol Energy and currently a senior communications representative at FirstEnergy, sold some of his stock in Consol days before it announced a $3.74 billion deal to buy a subsidiary of Dominion Resources in March 2010.
Cerenzia joined the confidential team handling the Dominion acquisition in February 2010, and was assigned responsibility for preparing investor slide shows and news releases, editing press releases, and distributing Consol information to newswires, according to the complaint.
Six days before the acquisition was to be announced, Cerenzia received an email from Consol's IR firm, which was not named in the suit. It included a “high-level announcement rollout” about the Dominion purchase. The email also stated that a pre-market public announcement about the Dominion acquisition was planned for March 15, 2010.
On March 11 of that year, Cerenzia received an email with a draft of the press release about the Dominion acquisition. The next day, Cerenzia allegedly logged into his Consol Energy Employee Incentive account and sold stock he had in the company, according to the complaint.
“By selling the Consol stock in advance of the public announcement, Cerenzia illegally avoided a loss of approximately $7,518,” according to lawsuit documents. On November 29 of that year, Consol terminated Cerenzia's employment for violating its insider trading policy, the suit claims.
Cerenzia agreed to settle the SEC charges without admitting or denying the allegations. Under the settlement, which is subject to court approval, he agreed to pay $15,453.
Cerenzia did not respond to an email requesting comment. His attorney, Paul Tershel, told PRWeek via email that "we appreciate the swift action of the court to approve the settlement we agreed to back in February."
A representative from Consol declined to comment on the matter.