A high-ranking executive from New York has been accused of insider trading by financial regulators, who claim he profited from confidential information about Foot Locker’s poor earnings performance. The 56-year-old former senior director allegedly made around $113,000 from illegal trades, but now faces a settlement deal that requires him to return the amount, plus an additional penalty of equal value.
According to the Securities and Exchange Commission (SEC), Barry Siegel, who spent two decades working at Foot Locker, used his knowledge of upcoming earnings announcements to short-sell the company’s stock on two separate occasions. The first instance occurred while he was still employed, and the second took place after he was let go as part of a company-wide restructuring effort.
Siegel’s alleged scheme involved short-selling a total of 11,000 shares of Foot Locker stock, which allowed him to profit from the subsequent decline in the company’s stock price. In May 2023, he short-sold 8,000 shares just two days before the company’s first-quarter earnings announcement, and then bought back the shares at a lower price, netting around $83,000. He repeated this process in August 2023, selling short 3,000 shares before the company’s second-quarter earnings announcement, and making an additional $30,132.
Foot Locker, a leading retailer of athletic footwear and apparel, has faced significant challenges in recent years, including declining mall traffic and increased competition. In response, the company has announced plans to close hundreds of stores and shift its focus towards more experimental and experiential retail concepts.
Siegel has agreed to settle the charges, neither admitting nor denying wrongdoing, and will pay back the $113,000 he made from the illegal trades, plus interest. He will also face a fine of equal value and be barred from serving as an officer or director of a publicly traded company in the future.
Leave a Reply