The Securities and Exchange Commission has filed a civil suit against former Carter’s Inc. VP of investor relations Eric Martin.
The federal agency accused Martin, first as director and later as VP of IR, of repeatedly trading Carter’s shares during blackout periods while he had nonpublic information on financial results, gaining profits and avoiding losses to the tune of $170K.
The SEC said Martin got the financial results while preparing executives for quarterly earnings calls and then bought or sold stock, depending on whether the reports were positive or negative. The activity occurred over at least eight quarters from January 2007 to April 2009.
"Sean McHugh, VP of IR and treasury for Carter's, told O'Dwyer's the company is aware of the SEC's enforcement action against Martin but did not have knowledge of his actions while he worked for the apparel company. "Carter's was unaware of his alleged actions during his tenure at Carter's," said McHugh. "We have fully cooperated with the SEC investigation."
Martin worked IR at Carter’s from March 2003 to March 2009, according to his LinkedIn profile, which says he is a managing director for MA Capital Management.
The complaint, filed in U.S. District Court for the Northern District of Georgia, said not all of Martin’s trades produced gains or avoided losses, noting Martin did most of the trading through his wife’s account and joint accounts. His wife is named as a relief defendant in the complaint.
Carter’s executives faced criminal charges by the U.S. attorney’s office in Georgia after a probe in 2009 that led to financial restatements at the company back to 2004. Martin was terminated in March 2009.
The kids clothing seller, which markets the Carter’s and OshKosh brands, is based in Atlanta.