Four men pleaded guilty to securities fraud in an insider trading scheme involving confidential information from investment banks, according to the U.S. Attorney's Office for the Eastern District of New York. John Lowe and Richard Ringel pleaded guilty on June 22 in federal court in Brooklyn, while David Cooper, a broker registered with the Financial Industry Regulatory Authority, and Randy Grewal previously pleaded guilty on September 22, 2025, and April 30, 2026. The scheme ran from January 2018 to May 2024 and generated more than $1 million in profit by using material nonpublic information about upcoming secondary stock offerings, including the identity of public companies, deal timing, deal structure, and offering price. Prosecutors said Cooper and another employee at a broker dealer obtained information from investment banks involved in underwriting the offerings and passed it to Lowe, Ringel, and others, who used it to short stocks before public announcements. The case highlights ongoing federal enforcement focus on securities fraud that harms retail investors through unequal access to market-moving information.
Broker Network Distributed Confidential Deal Data
Prosecutors said the scheme involved material nonpublic information about upcoming secondary stock offerings. Cooper and another employee at a broker dealer allegedly obtained information from investment banks involved in underwriting the offerings. Employees then passed information to Lowe, Ringel, and others, knowing it would be used to short stocks before public announcements. The information included the identity of the public company, deal timing, deal structure, and offering price. The structure mattered because secondary offerings can move stock prices when a company sells more shares to raise capital, potentially pressuring the share price due to dilution or discounted pricing.
SEC Statistics Show $175.5 Billion Follow-On Market in 2025
The U.S. market recorded 1,080 follow-on registered offerings in 2025, compared with 1,047 in 2024, according to SEC statistics. Total proceeds reached $175.5 billion in 2025. The fourth quarter was the largest period of the year, with $52.9 billion in proceeds, while the third quarter produced $38.9 billion. The first quarter recorded $40.4 billion in proceeds, and the second quarter recorded $43.3 billion. The SEC defines a follow-on registered offering as a registered securities offering by a public company whose securities already trade in the secondary market.
SEC Filed Parallel Civil Case in January 2025
The SEC filed a parallel civil case in January 2025 against Lowe, Grewal, Ringel, and Cooper. The SEC said Lowe and two entities he controlled sold short ahead of at least 200 issuer offerings and made at least $900,000 in profits. The SEC also alleged that Grewal and an associated entity sold short ahead of more than 90 offerings and earned at least $140,000. Ringel and entities connected to him sold short ahead of more than 300 offerings and made at least $1.5 million, according to the SEC complaint. The civil case described confidential information moving from underwriting channels into brokerage relationships, while the broker dealer received sales credits from offerings in which customers agreed to buy shares.
Wiretap Evidence Captured 2023 Trading Activity
Prosecutors said wiretap evidence showed Cooper and another broker dealer employee obtained confidential information from investment firms underwriting secondary offerings between January 2023 and May 2023. They then provided information to Lowe, Ringel, and others. The offerings involved Chicken Soup for the Soul Entertainment, Revelation Biosciences, and Tivic Health Systems. Prosecutors said trading took place before public announcements, including short sales after phone calls that followed the movement of inside information. Joseph Nocella Jr., U.S. Attorney for the Eastern District of New York, commented, "For years, the defendants brazenly exploited their access to inside information to gain an unfair advantage over the investing public. Insider trading destroys the public's faith in the fairness and integrity of our markets."
Maximum 20-Year Prison Sentences Await Sentencing
Lowe, Ringel, Cooper, and Grewal each face a maximum sentence of 20 years in prison. The government's case is being handled by the Business and Securities Fraud Section and the Criminal Section of the Long Island Division of the U.S. Attorney's Office for the Eastern District of New York. The SEC said about two thirds of standalone actions in fiscal 2025 involved charges against one or more individuals. FINRA reported 187 individual bar sanctions and 235 individual suspension sanctions in 2025, alongside $99.6 million in fines and disgorgement ordered.
FAQ
What did the four men plead guilty to on June 22 and in prior proceedings?
John Lowe and Richard Ringel pleaded guilty on June 22 in federal court in Brooklyn to securities fraud. David Cooper pleaded guilty on April 30, 2026, and Randy Grewal pleaded guilty on September 22, 2025. All four men were charged with an insider trading scheme that ran from January 2018 to May 2024 and generated more than $1 million in profit using confidential information about secondary stock offerings from investment banks.
How much profit did the SEC allege each defendant made in the civil case?
The SEC filed a parallel civil case in January 2025 alleging that Lowe and two entities he controlled made at least $900,000 in profits from short sales ahead of at least 200 issuer offerings. Grewal and an associated entity earned at least $140,000 from short sales ahead of more than 90 offerings. Ringel and entities connected to him made at least $1.5 million from short sales ahead of more than 300 offerings, according to the SEC complaint.
What maximum prison sentence do the defendants face?
Lowe, Ringel, Cooper, and Grewal each face a maximum sentence of 20 years in prison. The government's case is being handled by the Business and Securities Fraud Section and the Criminal Section of the Long Island Division of the U.S. Attorney's Office for the Eastern District of New York.
