FILED Department of Business arid Professional Regulation STATE OF FLORIDA Deputy Agency Clerk DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATI] cterk —Evette Lawson-Proctor Date 10/4/2016 DEPARTMENT OF BUSINESS AND File # PROFESSIONAL REGULATION, Petitioner, Vv. Case No. 2015-043085 STEVEN G. ROSEN, Respondent, / ADMINISTRATIVE COMPLAINT Petitioner, the Department of Business and Professional Regulation (Petitioner), files this Administrative Complaint before the Board of Accountancy (Board), against Respondent, STEVEN G. ROSEN (Respondent). 1. Petitioner is the state agency charged with regulating the practice of public accountancy, pursuant to Section 20.165, Florida Statutes, and Chapters 455 and 473, Florida Statutes. 2. Respondent's address of record is 7901 SW 6" Court, Suite 140, Plantation, FL 33324. 3. At all times material to this Complaint, Respondent was licensed a Certified Public Accountant (CPA) in the State of Florida, having been issued license number AC 22021. MATERIAL FACTS 4. On or about October 27, 2015, a Final Judgment regarding Respondent was entered against Respondent in the United States District Court for the District of New Jersey in Case 3:15- cv-07118-AET-LHG, in a case styled Securities and Exchange Commission (SEC) v. Steven G. Rosen, et al. 5. ‘The summary of allegations in Case 3:15-cv-07118-AET-LHG are as follows: (b). (¢). (d). (e). . This is an insider trading case that arose when two lawyers and an accountant misappropriated confidential information from a mutual client concerning the impending acquisition of the pharmaceuticals company Pharmasset, Inc. (“Pharmasset”) by trading Pharmasset securities in advance of the public announcement of the acquisition on November 21, 2011. In addition to trading in his own account, one of the lawyers tipped two close friends, a securities industry professional and another experienced securities trader, who both also profited by trading Pharmasset securities. The five defendants collectively realized a total of approximately $234,186 in illegal profits through their insider trading. On November 8, 2011, less than two weeks before the November 21, 2011 public announcement that Gilead Sciences, Inc. (“Gilead”) would acquire Pharmasset, a member of Pharmasset’s board of directors (“Board Member”) met with his personal legal, tax, and financial advisers, including Robert Spallina (“Mr. Spallina”), Donald Tescher (“Mr. Tescher”), and Respondent, to discuss end-of-year tax and estate planning matters (the “November 8, 2011 Meeting”). During the November 8, 2011 Meeting, the group in attendance — including Mr. Spallina, Mr. Tescher, Respondent, and Board Member — discussed the fact that Pharmasset’s board of directors was secretly negotiating to sell the company at a price per share significantly higher than the then-current price of Pharmasset stock. ‘This information was confidential and nonpublic and was discussed for the sole purpose of providing Board Member with legal, tax, and financial advice. Shortly after the November 8, 2011 Meeting ended, in breach of their respective fiduciary or other duties of trust or confidence owed to Board Member, Mr. Spallina, Respondent, and Mr. ‘Tescher purchased Pharmasset securities based on the material, nonpublic information regarding the sale of Pharmasset that they learned at the meeting. In addition, Mr. Spallina also tipped this information to two close friends — Thomas Palermo (“Mr. Palermo”), a securities industry professional employed by a registered broker-dealer (“Brokerage Firm”), and Brian Markowitz (“Mr. Markowitz”), an experienced securities trader. ‘Thereafter, both Mr. Palermo and Mr. Markowitz purchased Pharmasset securities based on material, nonpublic information regarding the acquisition of Pharmasset. 6. (g). On November 21, 2011, following the public announcement that Gilead was acquiring Pharmasset, the price of Pharmasset stock rose to $134.14, an increase of $61.47, or 84.6%, from its closing price on Friday, November 18, 2011, the previous trading day. (h). Within hours after the announcement on November 21, 2011, Mr. Spallina, Mr. Palermo, Mr. Markowitz, Respondent and Mr. Tescher liquidated their respective positions in Pharmasset securities, and, as a result: (a) Mr. Spallina realized illegal profits of approximately $39,156; (b) Mr. Palermo realized illegal profits of approximately $124,528; (c) Mr. Rosen realized illegal profits of approximately $27,634; (d) Mr. Markowitz realized illegal profits of approximately $32,931; and (e) Mr. Tescher realized illegal profits of approximately $9,937. (i). By knowingly or recklessly engaging in the afore-referenced conduct as described in Case 3:15-cv-07118-AET-LHG, Mr. Spallina, Mr. Palermo, Mr. Markowitz, Respondent, and Mr. Tescher violated, and Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78)(b) and 78n(e)| and Rules 10b-5 and 14e-3 thereunder [17 C.F.R. §§ 240.10b-5 & 240.14e-3]. The Final Judgment was entered against Respondent in Case 3:15-cv-07118-AET- LHG, on or about September 28, 2015. 7. @). ). (©). (). The Final Judgment entered against Respondent did the following: Permanently restrained and enjoined Respondent from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder; Permanently restrained and enjoined Respondent from violating, directly or indirectly, Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 promulgated thereunder; Ordered, Adjudged, and Decreed that Respondent was liable for disgorgement of $27,634, together with prejudgment interest of $1,991, and a civil penalty in the amount of $27,634 pursuant to Section 21A of the Securities Exchange Act of 1934. Respondent was responsible for satisfying the obligation of $57,929 to the Securities and Exchange Commission within 14 days after entry of the Final Judgment; and Acknowledged that the allegations in the filed SEC Complaint in Case 3:15- cv-07118-AET-LHG were true and admitted by the Defendant. COUNT I 8. Petitioner realleges paragraphs one (1) through seven (7) as though fully incorporated herein. 9. Section 455.227(1)(£), Florida Statutes (2015), provides that “[hJaving a license or the authority to practice the regulated profession revoked, suspended, or otherwise acted against, including the denial of licensure, by the licensing authority of any jurisdiction”, constitutes grounds for which disciplinary action make be taken. 10. Based on the facts set forth above, Respondent violated Section 455.227(1)(f), Florida Statutes (2015), by having the authority to practice as a Certified Public Accountant acted against by the SEC through the entry of the October 27, 2015 Final Judgment in Case 3:15-cv- 07118-AET-LHG, in the United States District Court for the District of New Jersey. COUNT II 11. Petitioner realleges paragraphs one (1) through seven (7) as though fully incorporated herein. 12. Section 473.323(1)(g), Florida Statutes, provides that “committing an act of fraud or deceit, or of negligence, incompetency, or misconduct, in the practice of public accounting” is subject to disciplinary action. 13. Based on the foregoing, Respondent violated Section 473.323(1)(g), Florida Statutes (2015), by using nonpublic, confidential trader information to gain illegal profits while serving as an accountant to the Pharmasset board member who disclosed the information for the sole purposes gaining of tax and financial advice. (SIGNATURE PAGE FOLLOWS) WHEREFORE, Petitioner respectfully requests that the Board of Accountancy enter an order imposing one or more of the following penalties: permanent revocation or suspension of Respondent’s license, restriction of practice, imposition of an administrative fine, issuance of a reprimand, placement of Respondent on probation, assessment of costs, corrective action and/or any other relief that the Board deems appropriate. Signed this 3" day of October, 2016. KEN LAWSON, Secretary Department of Business and Professional Regulation /s/Cristin Erica White Cristin Erica White, Chief Attorney Division of Certified Public Accounting Florida Bar No. 0641340 Department of Business and Professional Regulation Office of the General Counsel 2016 Blair Stone Road, Suite 319 ‘Tallahassee, FL. 32399-2202 (850) 717-1203 Telephone (850) 414-6749 Facsimile erica.white@myfloridalicense.com (primary e-mail address) lauren.garcia@myfloridalicense.com (secondary e-mail address) PC Found: — September 21, 2016 PC Found By: C. Borders, 'T’. Keegan, B. Shinn CEW /lac NOTICE OF RIGHTS Please be advised that mediation under section 120.573, Florida Statutes, 1s not available for administrative disputes involving this type of agency action. Please be advised that Respondent has the right to request a hearing to be conducted in accordance with sections 120.569 and 120.57, Florida Statutes, to be represented by counsel or other qualified representative, to present evidence and argument, to call and cross-examine witnesses and to have subpoenas and subpoenas duces tecum issued on his or her behalf if a hearing is requested. Any request for an administrative proceeding to challenge or contest the charges contained in the administrative complaint must conform to Rule 28-106.2015, Florida Administrative Code. Rule 28- 106.111, Florida Administrative Code, provides in part that if Respondent fails to request a hearing within 21 days of recetpt of an agency pleading, Respondent watves the right to request a hearing on the facts alleged. NOTICE REGARDING ASSESSMENT OF COSTS Respondent is placed on notice that Petitioner has incurred costs related to the investigation and prosecution of this matter. Pursuant to section 455.227(3)(a), Florida Statutes, the Board, or the Department when there is no Board, may assess costs related to the investigation and prosecution of the case excluding costs associated with an attorney's time, against Respondent tn addition to any other discipline imposed.

Docket for Case No: 16-006199PL