The U.S. Securities and Exchange Commission has a former Citigroup investment banker for allegedly tipping his brother about upcoming merger deals, the SEC said Thursday.

The SEC alleges that a former director in Citigroup Global Markets’ investment banking division in New York, repeatedly told his brother about upcoming deals involving Citigroup’s health care industry clients. It claims that in addition to trading on the information himself, the banker’s brother also leaked the information to a network of friends and family who also traded in advance of the deals.

The SEC has charged the brothers and six others in the case. And, in a parallel criminal action, the U.S. Attorney’s Office for the Northern District of California and the Federal Bureau of Investigation announced the criminal indictment of the brothers and one of the other traders.

Two of the tippees have agreed to settle the SEC’s charges without admitting or denying the allegations, agreeing to repay illegal profits and to pay a penalty. The allegations have not been proven against the remaining defendants. In those cases, the SEC seeks disgorgement of illegal profits, financial penalties, and other relief.

“Insider trading exposes publicly traded companies and their shareholders to serious harm, and damages the integrity of the markets,” said Robert Khuzami, director of the SEC’s Division of Enforcement. “In this case, an investment bank professional violated the trust of his employer and the clients who relied on the bank’s confidential advice.”

IE