By Dan Primack
March 26, 2013

FORTUNE — John Johnson, the chief investment officer for the $6.5 billion Wyoming Retirement System, today was charged by the Securities & Exchange Commission with participating in a $29 million insider trading scheme. Two other men also were charged by the SEC, in a plot related to the 2008 acquisition of Foundry Networks by Brocade Communications (BRCD).

At the time, Johnson was between jobs. The SEC alleges that he was tipped off about the deal before it was announced, by a California investment advisor named Matthew Teeple who, in turn, learned of the deal from Foundry chief information officer David Riley.

The SEC alleges that Johnson purchased 3,900 Foundry shares via six separate family brokerage accounts while on the phone with Teeple, three days before the merger was publicly announced. He also allegedly purchased 325 Foundry call option contracts via his personal trading account and, once he hung up the phone, sold short 1,200 Brocade shares.

On the day of the deal announcement, Foundry shares rose 32%, and Brocade shares fell 22%. Johnson netted around $136,000 from his trades.

Teeple also allegedly used Riley’s information to trade via his hedge fund, generating millions of dollars in profit (and also avoiding millions of dollars in losses, by reversing short positions). Not only on the Brocade acquisition, but also on other nonpublic Foundry situations.

Thomas Williams, executive director of the Wyoming Retirement System, tells Fortune that he was unaware of the SEC’s investigation and charges until we called. He said he is relieved that the alleged impropriety occurred before Johnson joined the retirement system in October 2010, but is nonetheless concerned.

“We will review all available information and take the necessary and appropriate steps,” Williams said. “Obviously we are concerned with any charges or activities that could besmirch the reputation of the Wyoming Retirement System.”

Fortune has reached out to Johnson, but has not yet received a reply.

UPDATE: Wyoming Retirement System has placed Johnson on “administrative review.”

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