Federal prosecutors have indicted a former executive with cannabis multistate operator Verano Holdings Corp. on a charge of insider trading.
Anthony Marsico, 39, a former executive vice president at the Chicago-based MSO, allegedly used privileged information regarding a pending merger of Verano and Vireo Growth to collect a six-figure profit, according to a Tuesday news release from the U.S Attorney’s Office, Northern District of Illinois.
The situation arose when Verano signed a “definitive agreement” in early 2022 to pay $413 million to acquire Minnesota-based Vireo Growth, then called Goodness Growth Holdings, only to back out of the deal later that year.
The two companies are currently locked in litigation over that aborted transaction.
Prosecutors: 900,000 shares bring $607,338 profit
“Prior to the public announcement” of the merger, prosecutors allege, Marsico bought 900,000 shares of Vireo stock, netting roughly $607,338 in “illegal profits,” according to the release.
Marsico faces six charges of securities fraud for opening a brokerage account and making 359 trades before Goodness Growth’s stock jumped 42% on the news of the ultimately failed merger.
Marsico has pleaded innocent, but in a statement to the Chicago Tribune, his attorneys contend his “investment activity was based solely on public and non-proprietary information.”
A grand jury indictment returned Jan. 16 also charged:
- Arthur Pizzello
- Robert Quattrocchi
- Timothy Carey
According to the Tribune, the three are Marsico’s “golf buddies from a private country club” with whom he shared the privileged information.
Of the three, only Quattrocchi made any money, according to a U.S. Securities and Exchange Commission complaint cited by the newspaper.
Carey has yet to sell any stock, and Pizzello lost $113,662.
Verano condemns ‘alleged actions’
In a statement to the Tribune, Verano denounced Marsico’s “alleged actions.”
“We strongly condemn the alleged actions taken by a former employee, and upon learning of the alleged conduct, fully cooperated with authorities investigating this matter,” Verano said, in part, in its statement.
“The alleged actions by this former employee, who was terminated a year ago, had no material impact on our business and have no bearing on our operations moving forward.”
Verano shares trade as VRNO on the Cboe Canada stock exchange and as VRNOF on the over-the-counter markets.
Viero shares trade as VREO on the Canadian Securities Exchange and as VREOF on the OTC markets.
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