Sometimes traders, lawyers and other Wall Street types just can’t act on a good stock tip quickly enough — even when they should know better.
James Cope is one of those people.
Cope, 67, a lawyer and a longtime board member of Nashville-based Pinnacle Financial Partners, was at a board meeting on Jan. 5 when he learned that the company was about to buy Avenue Financial Holdings, the Securities and Exchange Commission said Friday.
Cope apparently liked the deal so much that he logged on to his TD Ameritrade account while at the meeting and bought 2,000 shares, the SEC charged in a 16-page insider-trading lawsuit filed Friday.
The US Attorney’s Office for the Middle District of Tennessee filed a parallel criminal case against Cope.
Although Cope canceled the initial order, he made seven other purchases of Avenue stock that day, totalling 6,179 shares at roughly $13.75 a share.
Four of those purchases occurred within an hour of the conclusion of Pinnacle’s board meeting.
On Jan. 28, Pinnacle, which had grown over the years through a series of acquisitions, and Avenue announced that they signed a merger agreement.
Avenue’s stock price rose 40 percent, to $19.24 — leaving Cope with a whopping paper profit of $56,000, according to the SEC.
“We allege that Cope completely disregarded his responsibilities as an attorney and public company director,” Walter Jospin, Director of the SEC’s Atlanta Regional Office said in statement.
“Mr. Cope abused his position of trust as a member of Pinnacle’s board of directors to make a quick profit,” said Acting United States Attorney Jack Smith.
Even Cope, who lives in suburban Murfreesboro, couldn’t disagree with their reasoning: He pleaded guilty to the criminal charges filed by the Nashville US Attorney’s Office.
“I made a mistake in the timing of my purchase of stock, and I accept the consequences,” Cope said in a statement, adding that his law license has been temporarily suspended.
Cope’s friends also found it somewhat difficult to excuse his behavior.
“The truth is he made a mistake in judgment and he will accept responsibility,” Cope’s lawyer and friend of 40 years, Aubrey Harwell, told The Post.
Cope resigned from Pinnacle’s board on April 1 as details of his conduct emerged, according to the SEC complaint.
On Thursday, he resigned from his position as county attorney for Rutherford County, Tenn., a position he held for 33 years.
He has taken a leave of absence from his law firm, Cope, Hudson, Reed & McCreary.