Final Consent Judgments - Southern California Residents Charged with Insider Trading
Summary
The SEC obtained final consent judgments against Brent Cranmer and Daniel McCormick, two Southern California residents, for insider trading in Kaman Corporation securities ahead of its acquisition announcement. Cranmer was ordered to pay a $50,000 civil penalty and is prohibited from serving as an officer or director of a public company for five years. McCormick was ordered liable for disgorgement of $115,598, satisfied by parallel criminal forfeiture. Combined profits from the scheme exceeded $1 million.
What changed
On March 26, 2026, the U.S. District Court for the Southern District of New York entered final consent judgments against Brent Cranmer and Daniel McCormick in SEC v. Cranmer et al., No. 25-cv-6816. Cranmer, former head of a Kaman subsidiary, allegedly shared material nonpublic information about Kaman's sale with Jonathan Whitesides, who purchased call options and tipped McCormick. Whitesides and McCormick made combined profits exceeding $1 million trading Kaman securities before the acquisition announcement. Cranmer was permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, ordered to pay a $50,000 civil penalty, and barred from serving as an officer or director of a public company for five years. McCormick was ordered to disgorge $115,598, deemed satisfied by criminal forfeiture in United States v. Cranmer, et al., No. 25-cr-00212-MMG.
Compliance officers should recognize that trading on material nonpublic information about corporate transactions—including tips from corporate insiders—constitutes a serious violation of Section 10(b) and Rule 10b-5. The SEC expects robust compliance programs with controls preventing the misuse of MNPI, particularly around acquisition announcements. Officers and directors of public companies face personal liability including financial penalties and bars from serving in leadership roles.
What to do next
- Review and strengthen insider trading policies to explicitly cover tips and information sharing about material corporate transactions
- Ensure employee training addresses the prohibition against trading or tipping on material nonpublic information ahead of acquisitions and mergers
- Implement or enhance pre-clearance procedures and trading blackout periods around significant corporate announcements
Penalties
Civil penalty of $50,000 (Cranmer); disgorgement of $115,598 (McCormick); five-year prohibition from serving as officer or director of a public company (Cranmer)
Source document (simplified)
More in this Section
Brent Cranmer and Daniel McCormick
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26514 / March 30, 2026
Securities and Exchange Commission v. Brent Cranmer et al., No. 25-cv-6816 (S.D.N.Y. filed Aug. 18, 2025)
SEC Obtains Final Consent Judgments as to Two Southern California Residents Charged with Insider Trading
On March 26, 2026, the U.S. District Court for the Southern District of New York entered final consent judgments as to Brent Cranmer and Daniel McCormick in the SEC’s civil enforcement action that charged them with insider trading in the securities of Kaman Corporation.
According to the SEC’s complaint, while Cranmer was working as the head of a Kaman subsidiary, he learned that Kaman was in the process of selling itself. Cranmer allegedly shared material nonpublic information about the prospective transaction with his friend, Jonathan Whitesides, in an effort to coordinate trading in Kaman securities on Cranmer’s behalf. The complaint alleges that Whitesides purchased Kaman call options for himself, and tipped his friend, McCormick, who purchased Kaman stock and call options based on the material nonpublic information. The complaint further alleges that Whitesides and McCormick made combined profits of over a million dollars by trading in advance of Kaman’s acquisition announcement, but no one traded for Cranmer.
Cranmer and McCormick consented to final judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Cranmer was also ordered to pay a civil penalty in the amount of $50,000 and is prohibited from acting as an officer or director of a public company for five years. McCormick was ordered liable for disgorgement in the amount of $115,598, which is deemed satisfied by the forfeiture order entered against him in the parallel criminal case United States v. Cranmer, et al., No. 25-cr-00212-MMG (S.D.N.Y. filed May 12, 2025).
The SEC’s litigation was led by Ruth Pinkel and supervised by Stephen Kam of the Los Angeles Regional Office. The SEC’s investigation was conducted by Sara Kalin of the Division of Enforcement’s Market Abuse Unit, with assistance from John Rymas of the Market Abuse Unit’s Analysis and Detection Center. It was supervised by Assistant Director Diana Tani and Market Abuse Unit Chief Joseph Sansone. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority (FINRA).
Resources
CFR references
Named provisions
Related changes
Source
Classification
Who this affects
Taxonomy
Browse Categories
Get Securities & Markets alerts
Weekly digest. AI-summarized, no noise.
Free. Unsubscribe anytime.
Get alerts for this source
We'll email you when SEC Litigation Releases publishes new changes.