SEC Charges Two Former Wall Street Bankers in $18.5 Million Insider Trading Scheme

The U.S. Securities and Exchange Commission charged two former Wall Street investment bankers with fraud on Friday over their trading in South Jersey Industries shares ahead of the company's February 24, 2022 takeover announcement.

Lead banker and his friend accused

According to the lawsuit, Mr. Satsky, aged 59, was one of the heads of an energy and utility banking unit at the New York bank while working on South Jersey's business and serving as a lead banker on that deal. Mr. Wolfe, his 55-year-old friend and former colleague, allegedly traded about 2.2 million shares, making a profit of $18.5 million when the stock rose about 40% on the news.

The SEC's theory follows the familiar tipper-tippee pattern of insider-trading law: the person who holds confidential deal information and the person who trades on it can both be liable when material, nonpublic information is shared in breach of a duty. The complaint's allegations remain unproven unless the SEC prevails in court or the case settles.

$53 million of purchases in November and December

The purchases ran through the last two months of 2021 at a cost of at least $53 million, according to the complaint, filed as case 1:26-cv-07132 in the Southern District of New York. Infrastructure Investments Fund, a large private infrastructure fund, had agreed to take South Jersey private at $36 a share in a transaction valued at $8.1 billion.

South Jersey Industries, based in Folsom, New Jersey, was the parent of the South Jersey Gas and Elizabethtown Gas utilities, and the take-private deal closed in February 2023, roughly a year after its announcement, removing the company from public markets.

The two men spoke about a possible acquisition on several occasions, the SEC says, including at a nationally televised college basketball game they attended together with their wives.

Wolfe carried out his trading through eight entities that the agency has named as relief defendants, among them Evergreen Capital, Evergreen Financial, Empire Property Management and GAW Holdings. Evergreen manages the Wolfe family's assets. Relief defendants are not themselves accused of wrongdoing; they are parties the SEC says hold ill-gotten gains that a court can be asked to order returned. He and Satsky both left Credit Suisse for Bank of America in 2012.

A regulatory inquiry triggered the bank's internal investigation

The complaint alleges that the two individuals attempted to hide their actions, and it explains how the matter came to light. After the announcement, a financial regulator prompted the bank to run an internal inquiry into trading in South Jersey shares. Bank of America terminated Satsky in March 2025.

The U.S. Attorney's Office in Manhattan has been investigating the very same transaction since at least the spring of last year, and no criminal charges have been filed so far. Parallel civil and criminal tracks are common in insider-trading matters: the SEC must prove its case by a preponderance of the evidence, while prosecutors face the stricter beyond-a-reasonable-doubt standard and typically take longer to decide whether to file charges.

Satsky's lawyer, Robert Anello, said his client "strongly denies the SEC's allegations" and gave Wolfe no material nonpublic information about the company. Reed Brodsky, Wolfe's attorney, said his client emphatically denies the accusations and contends that the SEC ignored the testimony and evidence showing that Wolfe purchased the stock based on his "own independent investment thesis." The competing accounts frame the core factual dispute the SEC would have to prove: whether the trades rested on confidential deal information or on independent research.

The case fits the SEC's renewed focus on insider trading

The case is one that the SEC, under Paul Atkins, has said it will continue to bring while retreating on other issues. As Cryptopolitan reported this month, the agency's back-to-basics approach targets insider trading, market manipulation, fiduciary breaches and accounting fraud, and it recently built a Financial Reporting and Accounting Unit inside the Enforcement Division.

According to Cornerstone Research, enforcement actions were reduced by about 60 percent after the arrival of Atkins into power in April 2025, with the financial penalties for crypto enforcement reduced to $142 million in 2025, less than 3 percent of the previous year's total.

Charges and remedies sought

The charges against Satsky and Wolfe fall under Section 10(b) of the Exchange Act and Rule 10b-5, the statute-and-rule pairing at the heart of the SEC's antifraud authority, which prohibits trading on material nonpublic information obtained in breach of a duty. The SEC seeks permanent injunctions, civil penalties and officer-and-director bars against both men, disgorgement and prejudgment interest from Wolfe, and a conduct-based injunction against Satsky. Disgorgement would require Wolfe to surrender the alleged profits, federal law allows civil insider-trading penalties of up to three times the profit gained, and officer-and-director bars would keep the two men from serving as officers or directors of public companies.

Source: CryptoNewsNet