One of the great mysteries of the financial crisis of 2008 was where was the SEC while this catastrophe evolved? It wasn’t just Bernie Madoff, it was the complete failure to require publicly held companies to make full disclosures. Maybe with the change in Administrations, the SEC will remember its mandate to regulate publicly held companies.
Attorney Gordon Johnson
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Date: 7/15/2009 4:25 PM
WASHINGTON (AP) — The Securities and Exchange Commission on Wednesday said it charged 11 people in connection with separate insider trading schemes related to acquisition deals at two different companies.
Three of the 11 have reached agreements on financial settlements with SEC, while the SEC said it’s seeking injunctions against further violations, the return of ill-gotten gains with prejudgment interest and financial penalties from the other eight.
According to the SEC, five people illegally tipped off others or traded on private information ahead of Liberty Mutual Insurance Co.’s 2008 announcement that it would acquire Seattle-based insurance company Safeco Corp.
One of those five charged is Anthony Perez of Maitland, Fla., a former Goldman Sachs investment banker, who the SEC says illegally tipped off his brother, Ian C. Perez of Orlando, Fla.
Ian Perez bought Safeco call options one day ahead of the public announcement and later sold them for a profit of more than $152,000, the SEC said.
As part of a deal with the SEC, Anthony Perez will pay a penalty of $25,000 and Ian Perez will pay disgorgement and prejudgment interest totaling $152,992. Neither brother will admit or deny the charges, the SEC said.
The three other people charged in relation to the Liberty Mutual acquisition include Math J. Hipp of Seattle. Hipp received confidential information from his wife, an executive assistant at Safeco, bought Safeco call options ahead of the public announcement and later sold them for a profit of more than $118,000, the SEC said.
Under a settlement agreement, Hipp will pay $239,770 without admitting or denying the allegations.
The SEC also charged Peter E. Talbot of Springfield, Mass., a financial analyst, and his nephew, Carl E. Binette of Ludlow, Mass. The pair bought Safeco call options ahead of the public announcement and later sold them for a profit of more than $615,000, the SEC said.
The SEC also charged six other people for illegally trading on private information ahead of private equity firm Odyssey Investment Partners’ 2005 announcement that it would acquire Neff Corp.
The SEC claims that Thomas L. Borell, a Miami-based lawyer, obtained access to confidential information through his friendship with a Neff director. He then used information to buy more than $1.3 million of Neff stock ahead of the announcement and later sold it for nearly $1 million in profits, the SEC said.
Also charged in connection with the Odyssey acquisition are Sebastian De La Maza of Miami, along with brothers Alberto Perez and Jose G. Perez, also of Miami. The SEC also charged Kevan D. Acord of Overland Park, Kan., and an accountant who works for him, Philip C. Growney of Kansas City, Mo.
Copyright 2009 The Associated Press.