Ex-IndyMac Worker Settles Suit
A former vice president will return gains from alleged insider trading and pay a civil penalty.
A former employee of Pasadena’s IndyMac Bancorp Inc. has agreed to pay $81,456 to settle civil allegations of insider stock trading, the Securities and Exchange Commission said Wednesday.
Jameson L. Thottam, 33, who was vice president of corporate strategic planning for the savings-and-loan company until he was fired in September 2004, made illegal trading profits based on his advance knowledge of IndyMac’s second-quarter earnings last year, the SEC said.
Thottam, now a resident of Houston, neither admitted nor denied wrongdoing. His lawyer did not return a call seeking comment.
By mid-July 2004, the SEC claimed, Thottam became aware that IndyMac was going to report profit from continuing operations of 90 cents a share, beating the company’s stated target of 73 cents and a consensus estimate among Wall Street analysts of 84 cents.
On July 23 of last year, he bought 200 call options on IndyMac, giving him the right to purchase 20,000 common shares in the company by Aug. 30 at $30 apiece, the SEC said.
The call options were a leveraged bet that IndyMac’s share price would rise in value. Options move in the same direction as the underlying share prices, but more dramatically.
After IndyMac reported its better-than-expected quarterly results July 30, its stock closed at $33.22, up 4% from the previous session.
On the next trading day, Thottam sold his options for $79,628, netting a profit of $40,258, the SEC alleged. Thottam agreed to return the $40,258 in trading gains and pay a civil penalty in the same amount, plus interest of $940.
