2026-01-30 sec-litreleases complaint 247 KB 24,097 chars

SEC v. Kevin A. Van de Grift; and Gil Friedman, No. 1:23-cv-01491, Southern District of New York (Jan. 30, 2026) — Complaint

raw: Complaint against Defendants Kevin A. Van de Grift (“Van de Grift”) and Gil Friedman

Complaint against Defendants Kevin A. Van de Grift (“Van de Grift”) and Gil Friedman, No. 1:23-cv-01491 (S.D.N.Y. Jan. 30, 2026)

Caption: Securities and Exchange Commission v. Van De Grift

Exhibit of Kevin A. Van de Grift

Source PDF JSON

Enriched metadata

Scheme: insider-trading (99%)
Court: Southern District of New York
Case No.: 1:23-cv-01491
Victim loss: $1,000,000
Entity: Kevin A. Van de Grift

Classified insider-trading(confidence 99%). EDGAR detection: forms 4/3/5/144· recall 81% / precision 19%. detection rule →

Extracted insights

Dollar amounts 4

$1.30M $1.3 million $1M–$10M
$1.00M $1 million $1M–$10M
$300K $300,000 $100K–$1M
$300K $300,000 $100K–$1M

Entities 9

person civil money penalties
company francisco partners management l.p.
person gil friedman
person his stock
scheme_term insider trading
person material nonpublic information
agency Securities and Exchange Commission
person this action
company verifone securities

Triples 16

Securities And Exchange Commission brought this action
Kevin a. Van De Grift engaged in insider trading
Gil Friedman disclosed material nonpublic information
Kevin a. Van De Grift purchased Verifone securities
Francisco Partners Management L.P. agreed to acquire Verifone
Francisco Partners Management L.P. agreed to acquire Verifone for $23.04 per share
Kevin a. Van De Grift sold his stock
Kevin a. Van De Grift made illegal profits of approximately $300,000
Gil Friedman provided information to Kevin a. Van De Grift
Kevin a. Van De Grift purchased 60,000 shares
Defendants violated Section 10(b) of the Securities Exchange Act of 1934
Defendants violated Rule 10b-5
Securities And Exchange Commission seeks a final judgment
Securities And Exchange Commission seeks disgorgement of ill-gotten gains
Securities And Exchange Commission seeks civil money penalties
Securities And Exchange Commission seeks officer and director bars

PDF

Complaint against Defendants Kevin A. Van de Grift (“Van de Grift”) and Gil Friedman · Source

Text layers

Extracted body text (24,097c)

Sharan E. Lieberman (SL-6623)
Michael J. Cates
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000
Email: [email protected]

[email protected]

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

- against -

KEVIN A. VAN DE GRIFT, and
GIL FRIEDMAN,

Defendants.

Case Number: 23-cv-01491

ECF CASE

COMPLAINT

Plaintiff United States Securities and Exchange Commission (the “SEC”), for its

Complaint against Defendants Kevin A. Van de Grift (“Van de Grift”) and Gil Friedman

(“Friedman”) (collectively, “Defendants”), alleges:

SUMMARY

1. This case involves Van de Grift’s insider trading in Verifone Systems, Inc.

(“Verifone”) securities based on material nonpublic information that his close friend Friedman

unlawfully disclosed. Van de Grift purchased Verifone securities in advance of the April 9, 2018

public announcement that the private equity firm, Francisco Partners Management, L.P.

(“Francisco Partners”), had agreed to acquire Verifone for $23.04 per share in cash, a premium

of approximately 54 percent over its prior-day closing price. When the proposed Verifone

acquisition was announced the company’s stock price increased significantly, and Van de Grift

sold his stock for hundreds of thousands of dollars in profit.

2. Friedman, who was a consultant at Francisco Partners, learned of Francisco

Partners’ plan to acquire Verifone and provided that information to Van de Grift, whom

Friedman knew was an active “day trader.” On Sunday, March 4, 2018, Friedman spoke with the

senior deal partner at Francisco Partners leading the Verifone acquisition (the “Verifone Deal

Partner”). During this call, Friedman and the Verifone Deal Partner discussed the Verifone

acquisition. One minute after his call with the Verifone Deal Partner, Friedman called Van de

Grift and told him about his conversation with the Verifone Deal Partner. The next morning, Van

de Grift started buying Verifone stock. Within a week, he had purchased 60,000 shares worth

approximately $1 million.

3. On April 9, 2018, Francisco Partners announced its agreement to purchase

Verifone. The following day, the price of Verifone stock increased 52% from the previous day’s

closing price. Van de Grift sold all of his Verifone shares that morning and made illegal profits

of approximately $300,000.

NATURE OF PROCEEDINGS AND RELIEF SOUGHT

4. By engaging in the conduct described in this Complaint, Defendants violated, and

unless restrained and enjoined will continue to violate, Section 10(b) of the Securities Exchange

Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §§

240.10b-5].

5. The SEC seeks a final judgment: (a) permanently enjoining Defendants from

violating the federal securities laws by engaging in the transactions, acts, practices, and courses

of business alleged in this Complaint; (b) ordering Van de Grift to disgorge any ill-gotten gains

he received with prejudgment interest thereon pursuant to Exchange Act Sections 21(d)(3), (5),

and (7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)]; (c) ordering Defendants to pay civil money

penalties pursuant to Exchange Act Section 21A [15 U.S.C. § 78u-1]; (d) ordering officer and

director bars against Defendants pursuant to Exchange Act Section 21(d)(2) [15 U.S.C. §§

78u(d)(2)]; and (e) ordering any other and further relief the Court may deem just and proper.

JURISDICTION AND VENUE

6. The SEC brings this action pursuant to the authority conferred upon it by

Exchange Act Sections 21(d) and 21A [15 U.S.C. §§ 78u(d); 78u-1].

7. This Court has jurisdiction over this action pursuant to Sections 21(d), 21A, and

27 of the Exchange Act [15 U.S.C. §§ 78u(d); 78u-1; 78aa]. Defendants, directly and indirectly,

have made use of the means or instrumentalities of interstate commerce, of the mails, or of the

facilities of a national securities exchange in connection with the transactions, acts, practices, and

courses of business alleged herein.

8. Venue is proper in this District pursuant to 28 U.S.C. §1391(c)(3) and Section

27(a) of the Exchange Act [15 U.S.C. § 78aa(a)] because certain of the acts, practices,

transactions, and courses of business alleged in this Complaint occurred within this District,

including executions of securities transactions through a broker that maintains two offices in this

District. This case also involves a security listed on the New York Stock Exchange, which is

headquartered in New York, New York, and Francisco Partners maintains an office in this

District.

DEFENDANTS

9. Kevin A. Van de Grift, age 54, resides in Atlanta, Georgia. At all relevant times,

Van de Grift was an active securities day-trader and a part-time bankruptcy restructuring

consultant. Van de Grift has previously worked for public accounting firms and for a publicly-

traded company. Van de Grift is also a Certified Public Accountant. During the SEC’s

investigation, Van de Grift asserted his Fifth Amendment privilege against self-incrimination to

questions asked by the SEC staff.

10. Gil Friedman, age 50, resides in Sunny Isles, Florida. At all relevant times,

Friedman was a consultant for Francisco Partners. Friedman has previously worked for a public

accounting firm, publicly-traded companies, and Francisco Partners’ portfolio companies.

RELEVANT ENTITIES

11. Verifone Systems, Inc. (“Verifone”) is a payment systems company. At all

relevant times, Verifone was a public company based in California with its common stock listed

on the New York Stock Exchange and traded under the symbol “PAY.” In August 2018, several

months after the announcement of its planned acquisition of Verifone, Francisco Partners

completed the acquisition and Verifone’s stock was delisted.

12. Francisco Partners Management, L.P. (“Francisco Partners”) is a private equity

firm based in San Francisco that specializes in investments in technology businesses. Francisco

Partners maintains an office in New York, New York.

FACTS

A. Friedman Was Affiliated with Francisco Partners and Agreed to Not Disclose Its
Information.

13. From 2008 through approximately December 2022, Friedman consulted for and

worked as the Chief Financial Officer (“CFO”) for companies owned in whole or in part by

Francisco Partners. For example, following Francisco Partners’ 2009 acquisition of a majority

stake in Company A, a fleet management applications and services company, Francisco Partners

retained Friedman as CFO for Company A. Friedman served as Company A’s CFO until 2013.

Similarly, following Francisco Partner’s 2013 acquisition of Company B, a provider of electronic

payment systems, Francisco Partners hired Friedman as the CFO of Company B until 2017.

14. In April 2017, Francisco Partners agreed to sell Company B to a publicly-traded

company. Friedman was involved in the sale of Company B, and through his work on the deal,

Friedman had direct and recurring contact with the Verifone Deal Partner.

15. After Friedman left his position as CFO of Company B, he continued on as a

consultant for Francisco Partners. From approximately June 2017 through May 2018, Francisco

Partners periodically contacted Friedman and asked him to assist with due diligence regarding

potential investments or acquisitions, and also to determine his interest in becoming CFO of

current or potential Francisco Partners portfolio companies.

16. In connection with his consulting role, Francisco Partners required Friedman to

execute a non-disclosure agreement (“NDA”), which Friedman did in June 2017.

17. Under the NDA, which was in full force and effect at all relevant times, Friedman

owed a duty to Francisco Partners to keep certain information confidential, including information

about Francisco Partners’ “existing or potential investments” in “third parties.” The NDA

expressly prohibited disclosure of this information to persons outside of Francisco Partners’

“affiliates, officers, directors, employees or agents.” Friedman also acknowledged in the NDA

that he was “aware of, and agrees to comply with, the restrictions imposed by the United States

federal securities laws . . . on a person possessing material non-public information about a public

company.”

18. From May 2018 to approximately December 2022, Friedman was a partner with

Francisco Partners Consulting (“FPC”). FPC provides consulting services to Francisco Partners

portfolio companies. FPC terminated Friedman after learning the details of Van de Grift’s

unusual trading.

19. At all relevant times, Friedman owed a duty to Francisco Partners not to disclose

Francisco Partners’ material nonpublic information without a corporate purpose, including

information regarding Francisco Partners’ potential acquisition of Verifone.

B. Friedman and Van de Grift Had a Close, Personal Relationship.

20. At all relevant times, Van de Grift and Friedman were close friends. They lived a

few houses away from each other and communicated frequently by phone. They vacationed

together with their families. Shortly after Van de Grift sold his Verifone shares at a substantial

profit, Van de Grift and Friedman’s families took an Alaskan cruise together. In 2021, Van de

Grift agreed to become a trustee for Friedman’s estate upon Friedman’s death.

Van de Grift and Friedman Discussed Francisco Partners’ Business,
Including Nonpublic Francisco Partners’ Information.

21. Van de Grift and Friedman frequently discussed their careers and job

opportunities. For example, in June 2017, Friedman forwarded information to Van de Grift about

a potential job opportunity for Friedman at a Francisco Partners’ portfolio company.

22. Van de Grift and Friedman also discussed Friedman’s work at Company B and

his relationship with the Verifone Deal Partner. For example, in October 2017, Friedman sent

Van de Grift an article regarding the sale of Company B with the comments that the Verifone

Deal Partner “loves me :)” and “More awards...”

23. Friedman also shared with Van de Grift nonpublic information, including

information obtained from his relationship with Francisco Partners. In March and April 2018,

Friedman sent Van de Grift nonpublic financial information about a company he was consulting

for at the time and, in October 2018, Friedman forwarded Van de Grift a Francisco Partners

document stamped “DRAFT CONFIDENTIAL.”

Friedman Knew Van de Grift Was a Day Trader.

24. At all relevant times, Van de Gift was an active day trader. Between January 2017

and March 2020, most of Van de Grift’s investments were “day trades,” stock purchases that he

opened and closed within a single day. Friedman knew that Van de Grift was an active trader.

25. Van de Grift and Friedman discussed the financial markets and specific

investment opportunities. Aware of his friend’s trading, Friedman had a pattern of providing

investment recommendations to Van de Grift. Friedman frequently sent Van de Grift stock charts

with comments such as “lets [sic] discuss” or “How can you not buy this[?]”

C. Friedman Possessed Material Nonpublic Information Concerning Francisco
Partners’ Acquisition of Verifone.

26. In December 2017, Francisco Partners began discussions with the Verifone Chief

Executive Officer about acquiring Verifone. After initial due diligence, on February 2, 2018,

Francisco Partners submitted an offer that represented a premium of approximately 30 percent

over its market price. This proposed transaction was confidential and nonpublic.

27. The Verifone Deal Partner and a member of Francisco Partners’ Investment

Committee signed the February 2, 2018 offer letter to pursue the Verifone acquisition. The letter

stated that Francisco Partners was “highly confident” it would obtain financing for the

transaction, and given Francisco Partners’ “deep familiarity” with the payments industry, any

remaining due diligence would be “largely confirmatory.”

28. By no later than March 1, 2018, Verifone formed a “Transaction Committee” of

its Board of Directors to evaluate the offer, and engaged outside legal counsel and financial

advisors.

29. After Francisco Partners delivered the offer letter, and as the due diligence

continued, Francisco Partners sought individuals to replace Verifone’s existing senior

management. By March 3, 2018, Francisco Partners identified Friedman as a top candidate to

become Verifone’s CFO.

30. On Saturday, March 3, 2018, the Verifone Deal Partner sent a text message to

Friedman stating that he needed to talk about a “mega deal” involving a “CA payments

company.” At the time the Verifone Deal Partner sent the text, Verifone was a payments

company based in California. Further, the Verifone acquisition was the only “mega deal”

involving a “CA payments company” that the Verifone Deal Partner was involved with when he

sent the text.

31. The next afternoon, Friedman and the Verifone Deal Partner spoke by telephone

for approximately 24 minutes. During that call Friedman learned material nonpublic information

regarding Francisco Partner’s intention to acquire Verifone.

32. On March 6, 2018, two days after the call between Friedman and the Verifone

Deal Partner, a Francisco Partners employee working on the Verifone deal sent Friedman an

email stating: “I think [the Verifone Deal Partner] has spoken to you[] about” the Verifone

transaction. The next day, on March 7, 2018, Francisco Partners sent extensive Verifone data to

Friedman and gave Friedman access to the online “data room,” which contained Verifone

information created to allow Francisco Partners to conduct due diligence.

33. On April 19, 2018, the Financial Industry Regulatory Authority (“FINRA”)

requested information from Francisco Partners about its announcement that it planned to acquire

Verifone. The next day, Friedman responded that he first received information about the

Verifone transaction on “a call” he had with the Verifone Deal Partner. From January 2018

through April 20, 2018, the only call listed on Friedman’s phone records with the Verifone Deal

Partner was their 24-minute March 4, 2018 call.

34. At all relevant times, Friedman knew that Francisco Partner’s acquisition of

Verifone would cause the price of Verifone’s stock to increase and knew that the potential

acquisition of Verifone was confidential. Indeed, on March 7, 2018, Friedman signed a

nondisclosure agreement that specifically covered the Verifone information he was provided.

D. Friedman Illegally Tipped Van de Grift Information About the Verifone Deal, and
Van de Grift Traded on that Information.

35. One minute after Friedman’s March 4, 2018 call with the Verifone Deal Partner

ended, Friedman called Van de Grift. Friedman and Van de Grift spoke for approximately 15

minutes. Friedman and Van de Grift spoke again for almost 30 minutes the evening of March 4,

2018, and again the next morning, Monday, March 5, 2018, at around 9:00 a.m. for

approximately 15 minutes.

36. Upon information and belief, on one or more of these three phone calls, Friedman

conveyed material nonpublic information regarding Francisco Partners’ planned acquisition of

Verifone to Van de Grift.

37. When Friedman conveyed this information, he breached his duty to Francisco

Partners to keep certain information confidential, including information about Francisco

Partners’ “existing or potential investments,” to third-parties. Friedman knew, consciously

avoided knowing, or was reckless in not knowing that the information he conveyed to Van de

Grift included material nonpublic information, was disclosed in breach of his duty to Francisco

Partners, and that Van de Grift would use the information for trading.

38. Friedman received a personal benefit from his tip of material nonpublic

information to Van de Grift, including the benefit of providing a gift of information to his close

friend.

39. Minutes after Friedman and Van de Grift’s phone call on the morning of March 5,

2018, Van de Grift logged into his brokerage account and began buying Verifone securities.

40. When Van de Grift purchased these shares, he was aware of the material

nonpublic information Friedman passed to him, that Francisco Partners was going to acquire

Verifone, and Van De Grift traded on the basis of that information.

41. At the time Van de Grift purchased these shares he knew, consciously avoided

knowing, or was reckless in not knowing that the information Friedman conveyed to him about

Verifone was material nonpublic information, and that Friedman disclosed this information in

breach of Friedman’s duty to Francisco Partners.

42. On March 5, 2018, Van de Grift bought 25,000 Verifone shares in his own

account. On March 6, 2018, in accounts that Van de Grift possessed and controlled but were

maintained in the name of his minor children, he bought an additional 10,000 shares and another

10,000 shares in his own account. On March 9, 2018, he bought another 15,000 shares for his

own account.

43. Between March 5, 2018 and March 9, 2018, Van de Grift acquired 60,000

Verifone shares worth approximately $1 million.

44. After the close of trading on April 9, 2018, Francisco Partners and Verifone

announced that they entered into a definitive agreement under which an investment group led by

Francisco Partners would acquire Verifone for $23.04. The Verifone closing price on April 9,

2018 was $15.00. The next morning, the price increased and that day Verifone’s closing price

was $22.78, a 52 percent over the closing price on April 9, 2018.

45. On April 10, after the price reflected the news of the acquisition and had

increased dramatically, Van De Grift sold all of his shares of Verifone, reaping approximately

$300,000 of illicit gains.

E. Van de Grift’s Trading in Verifone Securities Were Different From His Other
Trades and Were His Most Profitable Trades.

46. From January 2017 through March 2020, as a day trader, Van de Grift actively

traded the securities of public companies. During that time, Van De Grift traded in 37 different

companies and made 581 “roundtrip” trades. However, Van de Grift’s trading in Verifone

securities differed from his usual trading patterns during this period in numerous ways.

47. During this three year period, other than the trades described above, Van de Grift

never bought or sold Verifone securities or the securities of any other payments systems

companies.

48. From January 2017 through March 2020, Van de Grift sold over two-thirds of the

securities he purchased within 24 hours. During that time, he held securities for more than 30

days only approximately three percent of the time. By contrast, Van de Grift held his Verifone

securities for approximately 37 days.

49. During this period, Van de Grift traded 98 percent of the time from his own

account. However, when he purchased the Verifone securities, he traded in the accounts that

were in the name of his minor children.

50. Van de Grift was not a successful securities trader; excluding the Verifone

windfall, he lost almost $1.3 million from his trades from January 2017 through March 2020.

Among these trades, the Verifone trades described above had the highest percentage return on

the lowest number of trades.

51. Van de Grift frequently researched securities he purchased using his brokerage

firm’s online research tools. However, before purchasing Verifone stock on March 5, 2018, Van

de Grift did not research Verifone using those tools.

CLAIM FOR RELIEF

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder

52. The SEC realleges and incorporates by reference each and every allegation in

paragraphs 1 through 51, inclusive, as if they were fully set forth herein.

53. At all relevant times, Friedman owed a duty of trust and confidence to Francisco

Partners to maintain the confidentiality of Francisco Partners’ nonpublic information and to

refrain from disclosing such information to others without a corporate purpose.

54. Friedman unlawfully tipped his close friend Van de Grift with material nonpublic

information about Francisco Partners’ acquisition of Verifone in violation of his NDA and in

breach of the duty he owed to Francisco Partners.

55. Friedman knew, consciously avoided knowing, or was reckless in not knowing

that the information he tipped was material nonpublic information and that he was breaching his

duty to Francisco Partners by disclosing material nonpublic information to Van de Grift.

56. Friedman received a personal benefit from his tip of material nonpublic

information to Van de Grift, including the benefit of providing a gift of information to his close

friend.

57. Friedman knew, consciously avoiding knowing, or was reckless in not knowing

that that the information he communicated would be used for trading.

58. Van de Grift purchased Verifone stock on the basis of material nonpublic

information that he received from Friedman. Van de Grift knew, consciously avoided knowing,

or was reckless in not knowing that Friedman disclosed to him material nonpublic information in

breach of a duty of trust and confidence for a personal benefit.

59. Van de Grift knew, consciously avoided knowing, or was reckless in not knowing

that the information was material and nonpublic.

60. By virtue of the foregoing, Defendants, in connection with the purchase or sale of

securities, by the use of the means or instrumentalities of interstate commerce, or of the mails, or

a facility of a national securities exchange, directly or indirectly: (a) employed devices, schemes

or artifices to defraud; (b) made untrue statements of material fact or omitted to state material

facts necessary in order to make the statements made, in the light of the circumstances under

which they were made, not misleading; or (c) engaged in acts, practices, or courses of business

which operated or would have operated as a fraud or deceit upon persons. By virtue of the

foregoing, Defendants, directly or indirectly, violated, and unless enjoined, will again violate,

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §

240.10b-5].

PRAYER FOR RELIEF

WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment:

Finding that Defendants violated the provisions of the federal securities laws as alleged

herein;

II.

Permanently restraining and enjoining Defendants from, directly or indirectly, engaging

in conduct in violation of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5

thereunder [17 C.F.R. § 240.10b-5];

III.

Ordering Defendant Van de Grift to disgorge all ill-gotten gains, plus prejudgment

interest;

IV.

Ordering Defendants to pay civil penalties pursuant to Section 21A of the Exchange Act

[15 U.S.C. § 78u-1];

Ordering that Defendants be prohibited from acting as officers or directors of any

issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15

U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15

U.S.C. § 78o(d)]; and

VI.

Granting such other and further relief as this Court may deem just, equitable, or necessary

in connection with the enforcement of the federal securities laws and for the protection of

investors.

DEMAND FOR JURY TRIAL

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission demands

trial by jury in this action of all issues so triable.

Dated: February 22, 2023 Respectfully submitted,

Sharan E. Lieberman SL-6623
Michael J. Cates *
U.S. Securities and Exchange Commission
1961 Stout Street, Suite 1700
Denver, CO 80294-1961
Telephone: 303-844-1036 (Lieberman)
303-844-1115 (Cates); 303-844-1000 (Main)
Email: [email protected]
[email protected]

Attorneys for Plaintiff
U.S. Securities and Exchange Commission

* Not admitted in S.D.N.Y (Pro Hac Vice
pending)

OCR text (25,604c · textlayer · 95% conf)