Federal prosecutors said four men pleaded guilty to securities fraud after a multiyear insider trading scheme used confidential information from investment banks to trade ahead of public stock offerings. The defendants made more than $1 million in profit, 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. 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.
Broker Shared Confidential Deal Information Before Public Offerings
Prosecutors said the scheme ran from January 2018 to May 2024 and involved material nonpublic information about upcoming secondary stock offerings. That information included the identity of the public company, deal timing, deal structure, and offering price.
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 structure mattered because secondary offerings can move stock prices. A company that sells more shares may raise capital, but the deal can also pressure the share price because investors expect dilution or discounted pricing.
FinanceFeeds has covered similar market abuse cases, including an insider trading case involving a former StoneX executive and an SEC case where the agency used the Consolidated Audit Trail to uncover a $47 million front running scheme. The latest guilty pleas place the brokerage channel at the center of the conduct.
Why Secondary Offerings Created The Trading Edge
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. In 2025, the U.S. market recorded 1,080 follow on registered offerings, 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.
U.S. Follow On Registered Offering Proceeds In 2025
SEC data, proceeds in billions of dollars
That market size explains why confidential offering information is valuable. If a trader knows that a discounted share sale is about to be priced, a short position before the announcement can become profitable once the market adjusts.
This is the retail investor problem at the center of the case. Ordinary investors trade after public announcements, while insiders with leaked information can position first.
SEC Complaint Said The Scheme Covered Hundreds Of Offerings
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 the same basic exchange alleged by prosecutors. Confidential information moved from underwriting channels into brokerage relationships, while the broker dealer received sales credits from offerings in which customers agreed to buy shares.
FinanceFeeds has also reported on a $1 million SEC filing insider trading case, showing how market sensitive information can become a trading weapon before the broader market receives it. The present case is different because it centers on secondary offering information from investment banks and a registered broker.
Prosecutors Say Wiretaps Captured Trading Around 2023 Deals
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. This Office is committed to protecting market integrity and rooting out bad actors, and it will continue to hold accountable those who engage in insider trading.”
Pete Gizas, Acting Special Agent in Charge of Homeland Security Investigations New York, commented, “By admitting they conspired to steal confidential information from investment banks and trade ahead of multiple secondary stock offerings, these defendants have acknowledged a years-long scheme that corrupted the markets for their own gain and generated more than a million dollars in illicit profit.”
Regulators Are Still Focused On Individuals And Market Abuse
The case lands during a period when U.S. regulators say they are focusing more on fraud, market manipulation, and individual accountability. The SEC said its fiscal 2025 enforcement program prioritized misconduct that harms investors and market integrity.
The SEC also said about two thirds of standalone actions in fiscal 2025 involved charges against one or more individuals. That matters for broker and trader cases because individual bars, guilty pleas, forfeiture, and prison exposure can matter more than corporate penalties.
FINRA data also shows that individual discipline remains a large part of the U.S. brokerage enforcement system. FINRA reported 187 individual bar sanctions and 235 individual suspension sanctions in 2025, alongside $99.6 million in fines and disgorgement ordered.
FinanceFeeds recently covered another brokerage enforcement case where FINRA expelled Reid & Rudiger and barred its cofounders after excessive trading generated millions in commissions. Together, the cases show why broker supervision remains a retail investor issue, not only a compliance matter.
Why This Case Matters For Retail Investors
The guilty pleas show how retail investors can be harmed even when they never speak to the wrongdoers. The alleged edge came from confidential market information, not from better analysis, faster research, or greater risk tolerance.
For the market, the concern is fairness. If some traders receive deal timing and pricing before public disclosure, the price discovery process becomes distorted and regular investors trade against hidden information.
The case also shows why enforcement agencies still focus on classic securities fraud even as crypto and AI cases receive more attention. FinanceFeeds has covered other market abuse matters, including the Andrew Left securities fraud trial and an SEC action against crypto firms accused of market manipulation, but the underlying investor protection issue is the same.
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.
Takeaway
The guilty pleas show how confidential information around secondary offerings can become a direct trading advantage against retail investors. The case is not only about $1 million in alleged illicit profit. It is about market access, broker supervision, and whether public investors receive price moving information at the same time as connected traders.