If he does have such information he would be very naive not to report it. Even private companies have some obligations under Sarbanes-Oxley. Below are bits and pieces cut from portions of guidance regarding Sarbanes Oxley in a write up on applicable matters per Bricker & Eckler LLP website:
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When you have knowledge of a felony, it is a crime for you under Federal law not to as soon as possible make known the same to some US judge or civil or military authority.
Absent knowledge of a felony or being under oath or penalty of perjury, whether you have a legal duty to speak generally depends upon your relationship to the organization and whether the relationship creates a fiduciary duty. Generally, being in any of the following four relationships results in fiduciary duties:
Director or member of the governing board, you have a duty to speak when an ordinarily prudent person in a like position and under similar circumstances would speak.
Officer, you have a duty to speak when an ordinarily prudent person in a like position and under similar circumstances would speak.
As a result of SOX, the following are the key areas for detection and addressing of corporate fraud and abuse:
Violations of law or breaches of fiduciary duty
Misstatements in financial statements
Fraud or deficiencies in internal controls
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It is my understanding that the SEC regards the obligation to report as absolute in such matters for any "suspected securities trading violations" and an implicit responsibility incumbent to any officer or director of any public company.
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