Reported by Sabrina Willmer

Brandon Charnas, already famous for being married to a social media icon, and infamous for refusing to cooperate with an insider-trading probe, is advancing into notoriety.

Not only is the US Securities and Exchange Commission looking at the $385,000 the regulator says he made using potentially non-public information about a bid by Staples for rival Office Depot. Now the Justice Department is pursuing a criminal investigation into the trades, according to people with knowledge of the matter.

Charnas and nine other people — including a hedge fund manager, a real estate developer and the former head of a woman’s fashion brand — have been caught up in the insider trading probes, according to court documents and people familiar with the investigations.

Charnas is best known as the husband of Arielle Charnas, the founder of the beleaguered fashion brand Something Navy. The roots of the investigations date back to just before Christmas 2020, when Charnas met friends for lunch in Miami. 

More than an hour later, Charnas invested $31,000 in Office Depot call options, essentially betting that the stock would rise, according to the SEC. In the days following, Charnas and other traders bought options and shares of the parent company, ODP Corp., according to the regulator.

On Jan. 11, 2021, the stock popped after Staples announced its offer. “You’re welcome boyz,” one of the traders texted in a group chat. “U the man,” another message read, according to SEC court documents. 

The SEC court case centers on a subpoena fight between the agency and Charnas, who co-founded a real estate firm. According to court documents, the SEC mentioned the names of other individuals whose names have come up as part of a request for Charnas to hand over text messages. 

While the SEC probe attracted widespread social media interest, the involvement of the DOJ hasn’t been previously reported.

Read full report: https://www.bloomberg.com/news/articles/2024-02-06/doj-sec-insider-trading-probes-snag-brandon-charnas-on-office-depot-bets