Biglaw

Ex-Attorney At Top 10 Biglaw Firm Charged With Insider Trading

He allegedly used the firm's confidential client information to make his illegal trades.

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Business concept about Insider Trading with phrase on the page.Trading on insider information never, ever ends well for anyone — especially if you’re an attorney at a Biglaw firm.

Romero Cabral Da Costa Neto, 33, of Rio de Janeiro, Brazil, started working as a visiting attorney at Gibson Dunn in September 2022. Costa stands accused of accessing confidential client information from within Gibson Dunn’s internal filing system to make trades ahead of a major pharmaceutical M&A deal. Earlier this week, he was arrested in Washington, D.C., and charged with insider trading. The National Law Journal has the details:

During Costa’s one-year employment as a visiting attorney, he allegedly accessed confidential information about the law firm’s work on biopharmaceutical company Swedish Orphan Biovitrum AB’s acquisition of CTI BioPharma Corp (CTIC), according to the SEC complaint. According to a press release, Gibson Dunn served as legal counsel to CTIC in the transaction.

The SEC complaint alleges that on the day before the deal was publicly announced, May 9, 2023, Costa purchased over 10,000 shares of CTIC, when he then reportedly sold for a profit of more than $42,000. Costa was not assigned to the deal for the firm, per the SEC.

But that’s not all: according to the SEC complaint, Costa accessed other nonpublic deal information from within Gibson Dunn’s document management system, and allegedly traded on that information too. Nicholas P. Grippo, Regional Director of the SEC’s Philadelphia Regional Office, offered this statement:

“As alleged in our complaint, Costa violated his duties to the law firm and its clients when he abused his position to enrich himself. Lawyers often have access to sensitive and confidential information about their law firms’ public company clients. When lawyers abuse that access, as Costa allegedly did here, we will promptly take action to hold them accountable. In this case, thanks to the quick work of the SEC’s staff, we were able to act within months of Costa’s alleged insider trading to ensure that he will be held accountable.”

As noted by the NLJ, Gibson Dunn is cooperating with authorities. “We are cooperating with authorities and have terminated our relationship with the individual, who was an international visiting attorney from another law firm,” a firm spokesperson said.

SEC Charges Former Attorney at U.S.-Based Global Law Firm with Insider Trading [SEC]
Ex-Attorney at Gibson Dunn Charged With Insider Trading [National Law Journal]

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Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter and Threads or connect with her on LinkedIn.

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