Ex-Analyst Charged With Tipping Off Mom, Insider Trading

LAKE FOREST, IL — A former financial analyst faces federal insider trading charges after he tipping off his mother ahead of a negative earning report while working at Lake Forest-based Stericycle, according to federal prosecutors and stock market regulators. Matt and Susan Brunstrum made nearly $330,000 in illegal profits after learning the company would miss its earnings target in the first quarter of 2016, according to a federal criminal charge filed Tuesday in Chicago.

Matt, 26, worked at Stericycle from 2014 to 2017, when he was fired for refusing to cooperate with the company's investigation into his possible violation of its insider trading policy, according to a complaint from the Securities and Exchange Commission. Susan, 56, owns and manages an interior design business. Both live in Chicago. Matt's father and Susan's late husband was an executive at Stericycle until his death in 2000.

In 2016, Matt Brunstrum was a financial analyst in the company's mergers and acquisitions department, according to the SEC. According to an online biography, he "valued, conducted due diligence, and helped integrate over 20 different acquired businesses."

Texts included in the complaint suggested Brunstrum thought he would not arouse the suspicions of federal regulators as long as they avoiding trading on the "blackout days" immediately surrounding an earnings announcement. In one exchange, he told a friend that he intended to buy put options on his company, essentially betting the stock would decline.

"That doesn't seem legal," his friend responded, according to the complaint.

"How so? I'm just an analyst. As long as I don't do it during our Earnings Blackout dates [it's] fine," Brunstrum allegedly wrote.

"I mean if you profited big money off of puts on your company, the [SEC] would be knocking on your door quickly," his friend responded.

"What I'm saying is the SEC doesn't look at analysts. [It'd be] only VPs and above," Brumstrum replied, according to the feds.

On the day of the earnings call on April 28, Stericycle's chief financial officer announced the company had a "$0.05 miss," according to a criminal charge filed by the Department of Justice in Chicago. The following day the company's stock fell more than 20 percent.

Using his insider information, Brumstrum allegedly contacted his mother and "directed or encouraged" her to buy more than 1,000 shares and options for the company, according to the feds. She does not face criminal charges but has been accused in a SEC civil action. Both complaints were filed Tuesday in Chicago.

Brunstrum referred all questions to an attorney, who declined to comment on both of their behalf.

Securities fraud can be punished by a maximum sentence of 20 years in federal prison. Brunstrum is due to be arraigned Aug. 2 in Chicago.