ADMINISTRATIVE PROCEEDING
FILE NO. 3-20810

April 4, 2022

The Securities and Exchange Commission today announced settled insider trading charges against Lloyd D. Reed, a business partner and close family member of a former Torotel, Inc. director, for unlawfully trading in Torotel securities while in possession of material, nonpublic information about Torotel's plans to seek a business combination.

The SEC's order states that Reed, a resident of Lawrence, Kansas, purchased Torotel stock in July and August 2019 during the same period that Torotel was engaged in discussions with potential strategic partners. The order finds that Reed purchased his Torotel stock on the basis of material, nonpublic information he learned from his business partner, and Reed's use of such information was in breach of a duty of trust and confidence he owed to his business partner. According to the order, following a December 2019 announcement that Torotel would be acquired for a premium of more than 400 percent, Reed sold all of his shares and realized a profit of more than $116,000.

The order charges Reed with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the SEC's findings, Reed consented to a cease-and-desist order and will pay a civil penalty of $232,591.

The SEC's investigation was conducted by Ty J. Cottrill, supervised by Laura M. Metcalfe and Jason J. Burt, and assisted by Judy Bizu of the SEC's Denver Regional Office.