(Reuters) - The U.S. Securities and Exchange Commission said a former senior executive at Qualys Inc (QLYS.O) will pay a $581,170 insider trading penalty for helping his brothers sell their shares in the Silicon Valley cloud security company after learning it would report disappointing revenue.
Amer Deeba, 51, who resigned this month as Qualys’ chief commercial officer, was accused of telling his brothers in April 2015 that the company had missed its first-quarter sales forecast, and arranging for their broker to sell their shares.
The SEC said Deeba’s brothers, both Lebanese citizens, avoided $581,170 of losses by selling their stock before Qualys revealed the shortfall and cut its full-year revenue forecast on May 4, 2015. Qualys’ share price fell 33 percent the next day.
“We announced the bad news today,” Deeba, then Qualys’ vice president of corporate development and strategic alliances, texted his younger brother after the Foster City, California-based company revealed it.
The SEC said Deeba, of San Francisco, also accepted a two-year officer and director ban, and did not admit or deny wrongdoing.
Deeba could not immediately be reached for comment, and it was unclear whether he has a lawyer. The SEC declined to comment.
Qualys did not immediately respond to requests for comment. The company and Deeba’s brothers, an engineer living in Abu Dhabi and a doctor living in Beirut, were not charged.
The SEC said Deeba had worked at Qualys from 2001 to 2018, and had been an “important member” of its leadership.
The case is SEC v Deeba, U.S. District Court, Northern District of California, No. 18-05346.
Reporting by Jonathan Stempel in New York; Editing by Susan Thomas