Federal securities regulators have settled insider trading charges against a Lexington man, David J. Cancian, who allegedly profited on American Superconductor Corp. shares ahead of news that sent the stock plunging 42 percent in 2011.
The Securities and Exchange Commission alleged that Cancian learned of the company’s looming trouble while having drinks with a friend who was a senior executive at American Superconductor. Cancian made a trade on April 4, the first trading day after the meeting, selling most of his stock in the Devens-based company. He also sold options to protect any losses on the shares he retained.
The SEC said Cancian reaped profits, and avoided losses, of over $46,930. According to the agency’s complaint, filed in federal court in Boston, Cancian will repay those funds, plus a civil fine of an equal amount, for a total of $97,843.
Cancian, 51, agreed to settle the case without admitting or denying the allegations. His lawyer declined to comment.
The SEC did not name the insider who gave Cancian the information. Regulators said the investigation is ongoing. Last summer, a former American Superconductor executive pleaded guilty to criminal securities fraud in a related case and paid $170,000 to settle separate civil charges of insider trading.
This is the latest case brought following allegations of stolen intellectual property that have embroiled American Superconductor for three years. In 2011, the company sued China’s Sinovel Wind Group Ltd. for alleged copyright infringement and for stealing parts of its wind turbine control software.
On April 5, 2011, after the close of trading, American Superconductor announced that its financial results for its fourth quarter and fiscal year ended March 31, 2011, would be lower than expected due to the deteriorating relationship with Sinovel, its primary customer.