The U.S. Securities and Exchange Commission has sued Scott O. Hirsch and Kenneth L. Friedman in the federal District Court for the Southern District of Florida over allegations they engaged in insider trading where they netted a combined total of $575,000 involving the online pet pharmacy PetMed Express.

The SEC is seeking injunctive relief and disgorgement of "ill-gotten gains" in the civil enforcement action, which was filed Tuesday.

A former senior manager of PetMed, which is an online pet pharmacy that sells medications and other health products for cats and dogs, allegedly tipped defendants nonpublic information about PetMed's fiscal 2017 fourth quarter and year-end financial results, according to the SEC complaint. Subsequently, Hirsch made $74,536 while Friedman got $501,697 from their trading. A relative of Hirsch also made a profit of $20,936.

Hirsch, 53, and Friedman, 69, each live in Delray Beach, according to court papers. Hirsch is an advertising executive. In the 1990s, Hirsch and the senior manager worked at the same advertising company and have remained friends since then. Friedman is the president of Kenneth L. Friedman, a New York-based insurance company. He met the senior manager, who lives in South Florida, in a casino, the SEC alleged.

The senior manager was among the committee members who met weekly to discuss financial data and metrics to access the financial condition and business operations of the company, according to the complaint. The position gave him a detailed understanding of the financial conditions of PetMed, which is based in Delray Beach. Between Jan. 1, 2017, to May 8, 2017, the senior manager had access to quarterly earnings, business operations and financial performance.

Each quarter, all employees at PetMed received an email each quarter that reminded them of the blackout period "where there may be no trading of the Company's stock in any manner," according to the SEC complaint. PetMed is listed on the NASDAQ under the ticket "PETS."

Soon after the senior manager prepared and finalized preliminary fiscal 2017 fourth quarter and year-end financial results, he likely tipped Hirsch in a series of four phone calls over three days, the complaint said. Hirsch acquired 22,307 shares of PetMed common stock, the first time he traded in that security.

Hirsch sold the stock three days later after PetMed issued its earnings announcement and the stock jumped over 25%, moving from the previous day's close of $24.22 per share to $30.38 at the day's closing. That was the only stock Hirsch traded in during 2017.

The senior manager met with Friedman a couple of times while playing high-stakes poker games at a South Florida casino. The SEC complaint alleges that the suspect and other players knew the senior manager held a position at PetMed.

In one of those games, the senior manager boasted that PetMed was "doing great" and recommended buying the company's stock. Friedman said he was "flabbergasted" by the comment, the SEC complaint said.

"You can't do that," Friedman said according to the complaint, "if you're working for a public company, if you have information."

In either March or April of 2017, the senior manager had a brief conversation and pitched an investment idea into the stock. In a subsequent poker game, the complaint stated, Friedman told the senior manager he was purchasing the stock. He bought options and 81,179 shares of common stock. He made a realized profit of $501,697.

According to the SEC complaint, plaintiff demands the suspects disgorge all gains and pay a civil money penalty and whatever the court determines to be "just and necessary."

Robert Levenson, senior trial counsel for the SEC, and Jordan Cortez, senior counsel for the SEC, declined to comment.

Attempts to ascertain contact information for the defendants or the insurance firm were not immediately successful.