SEC charges group of ‘golfing buddies’ with insider trading by Tom Huddleston, Jr. @FortuneMagazine July 11, 2014, 4:37 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons A group of New England “golfing buddies” just learned the hard way that golf course patter is not exempt from regulatory scrutiny. The Securities and Exchange Commission said Friday it has charged seven individuals in an alleged insider trading scheme that the federal agency claims reaped more than $554,000 in illegal profits. The seven men, most of whom are amateur competitive golfers, allegedly exchanged inside information regarding Devens, Mass.-based technology company American Superconductor, the SEC said in a lawsuit filed in federal court in Boston. In the fall of 2009, the SEC says that one of the seven men, Eric McPhail, obtained information on a pending $100 million American Superconductor contract from an executive at the company. That executive belonged to the same country club and passed the inside information along to his friends, each of whom traded and profited from the info. In a September 2009 e-mail sent to two of the other defendants, the SEC’s complaint says McPhail claimed that he attended a Boston Red Sox game with an American Superconductor exec who tipped him off to the contract. McPhail closes out the e-mail by referencing some expected retribution for the tip: “I like Pinot Noir and love steak . . . looking forward to getting paid back” he writes. “Good Luck . . . SHHHHHHHHHHHHHH!!!!!!!!!!!!!!” The SEC adds that McPhail continued to provide his friends with inside information on American Superconductor’s quarterly earnings, as well as expected drops in the company’s share price, through November 2010. “Whether the tips are passed on the golf course, in a bar, or elsewhere, the SEC will continue to track down those who seek an unfair advantage trading stocks,” Paul Levenson, the director of the SEC’s Boston office, said in a statement. “Working with our partners in law enforcement, we are sending a message to all investors that insider trading does not pay.” The SEC said Friday that it will seek to have the seven men return their allegedly illegal profits, plus interest, as well as to pay penalties of up to three times their gains. None those accused could be reached for comment. The SEC’s lawsuit is the latest example of insider trading and golf sharing headlines, as it follows reports from earlier this summer linking professional golfer Phil Mickelson to a sports gambler who allegedly received inside information from Carl Icahn ahead of the billionaire activist investor’s 2011 attempt to buy Clorox. It was later reported, though, that federal officials had found no evidence that Mickelson actually engaged in any illegal trades.