The SEC announced today that following a seven-day trial, a federal jury in Boston found in favor of the SEC and against a former Fidelity Investments trader, David K. Donovan, on charges of insider trading. The jury returned its verdict on Friday, November 20, 2009. It found that Donovan engaged in insider trading in the stock of Covad Communications, but found his co-defendant, David R. Hinkle, was not liable for insider trading.
The SEC alleged that, between July and September 2003, Donovan obtained confidential information from Fidelity’s internal order database that Fidelity was purchasing a large amount of Covad common stock for its advisory clients. The SEC claims that although Donovan was denied permission by Fidelity to buy Covad stock in his own personal account, he caused purchases of the stock to be made in the account of his mother.