NEW YORK (CNN/Money) - A former U.S. postal worker who received stock tips from a business magazine before it was mailed to subscribers has agreed to pay about $580,000 to the Securities and Exchange Commission to settle charges of insider trading.
Davi Thomas, formerly of Mount Vernon, N.Y., and currently living in Kerala, India, pulled tips from the "Inside Wall Street" column of Business Week magazine from 1996 to 1999, according to the SEC. Thomas allegedly broke postal regulations when he read the magazines at the Mount Vernon postal sorting facility before they were mailed to subscribers and newsstands.
Thomas is accused of trading on the information and sharing it with a friend, Lionel Thotam. The two men bought stock shares in companies that were favorably mentioned in the columns, and in most cases sold the shares after their prices rose the following day.
Thotam allegedly paid Thomas $10,000 for the illegal tips. Thomas profited $153,711 from the illegal trades and Thotam profited $77,213, according to the SEC.
Thomas agreed to hand his profits over to the SEC, which, in addition, ordered him to pay a civil penalty of $153,711 and prejudgment interest of $273,503. Thotam settled with the SEC in 2002. The SEC settled with Thomas in the U.S. District Court for the Eastern District of New York on May 2.