A former accountant at pizza chain Domino’s has agreed to settle charges of insider trading brought by the Securities and Exchange Commission (SEC).
Leonard Barr will pay a civil penalty of $68,360 as part of an agreement filed in the U.S. District Court for the Eastern District of Michigan on Friday. He also consented to a five-year suspension from appearing or acting before the SEC as an accountant.
Barr worked as an accountant at Domino’s from 1996 to July 2020. For at least the final four years of his tenure, he served as a unit controller, which granted him access to confidential data related to the financial performance of Domino’s, according to the SEC’s complaint.
In 2016, following receipt of the company’s third-quarter financial results, Barr allegedly purchased call options that were set to expire three days after Domino’s publicly announced its earnings for the quarter. Upon the announcement, the company’s stock rose, and Barr sold his options for a profit of $1,300, according to the SEC.
Barr allegedly repeated this practice after receiving financial information for the fourth quarter of 2020 and the fiscal year 2020, this time turning a profit of $19,331. He then purchased 200 shares of Domino’s stock a day prior to the company announcing its financial results and sold those shares after the announcement for a profit of $13,549.
“At the time of his trading … Barr knew or was reckless in not knowing that the information regarding the Company’s earnings results and financial performance that had been entrusted to him was material non-public information that had not yet been disclosed to the public,” the SEC stated. “… Barr knowingly or recklessly breached his duty to Domino’s by trading in Domino’s securities on the basis of that confidential information for his own benefit.”
In all, Barr profited $34,180 from the alleged scheme. He neither admitted nor denied the SEC’s findings in reaching settlement.