The Tennessee Supreme Court suspended former Rutherford County Attorney Jim Cope from practicing law Tuesday after he pleaded guilty to the felony charge of insider trading in federal court.
The court ordered the Board of Professional Responsibility to hold a formal proceeding to determine the final discipline to be meted out as a result of Cope's guilty plea to charges he obtained $56,000 through insider trading as a director of Pinnacle Financial Partners while it was in the process of acquiring Avenue Holding of Nashville.
Cope, who had been the county attorney for some 30 years before resigning Oct. 19, must comply with the Tennessee Supreme Court Rule regarding the obligations and responsibilities for suspended attorneys, according to a board statement.
In the wake of the guilty plea, Cope announced his law license would be suspended temporarily and he would take a temporary leave of absence from his law firm, Cope, Hudson, Reed & McCreary. He is to be sentenced Nov. 14 after agreeing to two years of probation, including the first nine months on house arrest, and a $55,000 fine.
But a separate civil case filed by the Securities and Exchange Commission remains active, and he could be penalized further.
How long the suspension of his law license will last and whether that will be the extent of the punishment is unclear.
Sandy Garrett, a spokeswoman for the Board of Professional Responsibility of the Supreme Court of Tennessee, said once a temporary suspension takes effect, Cope will have a hearing to determine his final discipline. The Supreme Court requires the board to apply rules set forth by the American Bar Association.
"I would imagine this is a lengthy suspension, if not disbarment," Garrett said.
Not only was Cope the county attorney for more than three decades, he represented Middle Tennessee Electric Membership Corporation, Consolidated Utility District, Smyrna Airport Authority and, at one point, the town of Smyrna and The Daily News Journal. He left those utility posts Oct. 20, the day before he entered a guilty plea in federal court.
Cope stepped down from the board of directors and executive committee of the board with Pinnacle Financial Partners in early April, shortly before the banking company reported to the Securities and Exchange Commission one of its directors might have violated its insider trading rules. Pinnacle is not being charged in the case.
In a civil complaint against Cope, separate from the federal charge, the SEC alleges he bought 10,179 shares of Avenue Financial Holdings stock between Jan. 5 and Jan. 11, 2016 while in possession of "material, non-public information" that Pinnacle and Avenue were in the midst of confidential merger discussions to complete a merge in the third quarter of 2016.
During a Jan. 5 Pinnacle board meeting, Cope started buying Avenue stock at $13 a share on his TD Ameritrade account after finding out about the merger talks - including Pinnacle's informal offer to acquire Avenue at a premium, $19 per share, which was higher than its share price at the time, according to the filing.
"Trading records indicate that Cope placed his first order to purchase AVNU share while that meeting was still in progress," the complaint states.
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