SEC accuses ex-Heartland Payment CEO of insider trading


(Reuters) – The U.S. Securities and Exchange Commission on Tuesday charged the former chief executive of Heartland Payment Systems Inc and his romantic partner with insider trading ahead of the payment processor’s $4.3 billion takeover by Global Payments Inc (GPN.N).

FILE PHOTO: The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, DC, U.S., June 24, 2011. REUTERS/Jonathan Ernst/File Photo

Robert Carr, Heartland’s founder and CEO, was accused of telling Katherine Hanratty in November 2015 that Global Payments had offered to buy Princeton, New Jersey-based Heartland for a premium and giving her a $1 million check with instructions to open a brokerage account and buy $900,000 of Heartland stock.

Hanratty did what Carr asked, and sold her stock for a $250,628 profit in April 2016, four months after the merger was announced, the SEC said in a complaint filed with the federal court in New Haven, Connecticut.

Global Payments, based in Atlanta, agreed on Dec. 15, 2015 to buy Heartland for $100 per share, a 17.5 percent premium, and more than 28 percent above where it had traded on Dec. 9, before media began reporting a possible merger.

Carr, 73, lives in New London, New Hampshire, and Hanratty, 65, lives in Watertown, Connecticut, the SEC said. Their lawyers could not immediately be identified. Carr could not immediately be reached for comment. A call to Hanratty was not answered. The SEC did not immediately respond to a request for comment.

The case is SEC v Carr et al, U.S. District Court, District of Connecticut, No. 18-01135.

Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky

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