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- A Boca Raton man is accused of using insider information to profit from an ADT-Google partnership.
- The man, Charles Baugh, reportedly learned about the deal from a relative who worked at ADT.
- Baugh faces up to 20 years in prison and a $5 million fine.
WEST PALM BEACH — A Boca Raton man faces federal securities fraud charges and up to 20 years in prison for allegedly trading on confidential information ahead of a major corporate partnership between ADT and Google, netting hundreds of thousands in illicit profits.
Federal prosecutors and the U.S. Securities and Exchange Commission say Charles Baugh, 59, bought a large number of stock options in ADT after learning that the home-security firm was about to strike a major deal with Google.
According to court records, the information came from an unnamed relative who worked in a senior position at ADT. During a family gathering over the July 4 weekend in 2020, Baugh asked the relative about his work. The relative confided that Google was planning to invest in ADT and form a partnership — information that had not yet been made public.
Investigators say Baugh used the information to buy about $66,000 worth of ADT stock options, financial contracts that increase in value if the company’s stock price rises. He made these purchases using five different online accounts.
He also told another relative to buy ADT stock options. That person made trades in smaller amounts and later made over $76,000 in profit, according to the SEC.
In 2020, ADT and Google publicly announced their deal: a $450 million investment by Google in exchange for a 6.6% ownership stake in ADT, and a plan to develop new smart home security products jointly. ADT’s stock price jumped more than 50% that day.
Baugh immediately sold his options and, according to the government, walked away with about $320,000 in profit. In total, the SEC says his actions led to nearly $400,000 in combined profits for himself and his relative.
If convicted, Baugh faces a potential fine of up to $5 million, as well as two decades in prison. He did not have an attorney listed as of June 11.
Hannah Phillips is a journalist covering public safety and criminal justice at The Palm Beach Post. You can reach her at [email protected].
