Financial watchdogs charged a 56-year-old New Yorker with insider trading on Tuesday, alleging the executive knew in advance that Foot Locker’s disappointing earnings would trigger a stock selloff. In total, authorities said the exec made about $113,000—and now he has to pay it back double, according to a pending settlement deal.
Per the Securities and Exchange Commission, Barry Siegel shorted the sneaker and apparel brand’s stock twice, once while he still worked as a senior director of order planning and management, and a second time after Foot Locker terminated him in a round of corporate layoffs. Siegel had worked at the company a total of two decades at that point, and authorities said he knew there would be negative sales and inventory data in earnings calls with investors.
According to the SEC’s complaint, Siegel short-sold 8,000 shares of Foot Locker’s stock in May 2023, just two days before the company’s first-quarter earnings announcement. Typically, a short sale is a bet that a stock price will fall. An investor borrows shares at the current market price, hopes the stock nosedives, and buys back the same number of shares at the lower price and profits. In Siegel’s case, the sneaker and athletic retailer’s stock price fell 27% after it announced earnings before the market opened on May 19. At 9:31 a.m. that same day, Siegel allegedly made about $83,000 after he bought stock to cover his short position.
His second transaction was in August 2023, about a week after Foot Locker laid him off, authorities said. Siegel sold short 3,000 shares before the company’s second-quarter earnings went out and Foot Locker’s stock price fell 28%. That time, Siegel made $30,132, the SEC said.
Foot Locker, founded in 1974 and known for carrying major brands like Nike, Adidas, Puma, and limited-edition kicks, has struggled in recent years amid a slowdown in mall traffic; it announced plans to close 400 stores by 2026. The plan is part of a vision to focus more on sneaker hype and experimental concept stores and pivot away from shopping malls.
Siegel has neither admitted nor denied the charges and he agreed to pay back the $113,000 he made shorting the stock, plus interest, on top of a $113,000 fine. He is also barred from serving as an officer or director of a public company.
An SEC spokesperson declined to comment beyond the details in the press release. Siegel did not immediately respond to a request for comment.
This story was originally featured on Fortune.com