Financial Regulatory Bodies Charged NEW YORK — A 56-year-old New York man was charged with insider trading Tuesday, alleging the CEO knew in advance that Foot Locker’s disappointing results would Profits That could trigger a selloff in shares. In all, authorities said the executive made about $113,000 — and now must pay back twice that amount, according to a pending settlement agreement.
According to the Securities and Exchange Commission, Barry Siegel Summary Siegel sold shares of the sneaker and apparel brand twice, once while he was still working as senior director of order planning and management, and again after Foot Locker ended its sale of his shares in a round of layoffs. Siegel had been with the company for two decades at that point, and authorities said he knew there would be negative sales and inventory data on earnings calls with investors.
According to the SEC complaint, Siegel short-sold 8,000 shares of Foot Locker stock in May 2023, just two days before the company reported its first-quarter earnings. Typically, a short sale is a bet that a stock’s price will decline. An investor borrows shares at the current market price, hopes the stock will drop sharply, and buys back the same number of shares at a lower price and earnings. In Siegel’s case, the sneaker retailer’s stock fell 27% after it reported earnings before the market opened on May 19. At 9:31 a.m. that same day, Siegel allegedly made about $83,000 after buying the shares to cover his short position.
His second trade, authorities said, was in August 2023, about a week after he was laid off from Foot Locker. Siegel sold 3,000 shares short before the company reported second-quarter earnings, and Foot Locker’s stock price fell 28%. Siegel made $30,132 at the time, the SEC said.
Foot Locker, founded in 1974 and known for carrying major brands like Nike, Adidas and Puma and limited-edition shoes, has struggled in recent years amid slowing mall traffic and has announced plans to close 400 stores by 2026. The plan is part of a vision to focus more on sneaker buzz and experiential stores and move away from malls.
Siegel neither admitted nor denied the charges, and agreed to pay back the $113,000 he gained from short selling the stock, plus interest, and a $113,000 fine. He is also prohibited from serving as an officer or director of a public company.
An SEC spokesman declined to comment on the details in the press release. Siegel did not immediately respond to a request for comment.