IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

COMPLAINT

Plaintiff Securities and Exchange Commission (the "Commission") alleges for its Complaint the following:

SUMMARY

1. This matter involves unlawful insider trading in the common stock of Conestoga Enterprises, Inc. ("Conestoga") by defendant John R. Felder, who purchased Conestoga's stock while in possession of material, nonpublic information concerning a proposed merger between Conestoga and NTELOS, Inc. ("NTELOS"), which he had unlawfully received from defendant Jean M. Ruhl, a member of Conestoga's Board of Directors.

2. On July 25, 2001, Conestoga announced that it had signed an agreement to merge with NTELOS. On six separate days between July 2 and July 18, 2001, after being tipped by Ruhl, Felder purchased a total of 9,200 shares of Conestoga common stock. As a result of his illegal trading, Felder had potential profits of $68,476.

3. As a result of the conduct alleged in this Complaint, Felder and Ruhl have violated and, unless restrained and enjoined, will continue to violate Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §78j(b), and Rule 10b-5, 17 C.F.R. §240.10b-5, thereunder.

JURISDICTION AND VENUE

4. The Commission brings this action pursuant to authority conferred by Section 21(d) of the Exchange Act, 15 U.S.C. §78u(d), to enjoin such acts, practices and courses of business, obtain disgorgement and prejudgment interest, civil penalties, and for other appropriate relief.

5. This Court has jurisdiction over this action, and venue lies in this District, pursuant to Sections 21(d) and 27 of the Exchange Act, 15 U.S.C. §§78u(d) and 78aa.

6. Certain of the acts, practices and courses of business constituting the violations alleged herein occurred within the Southern District of New York and elsewhere, and were effected, directly or indirectly, by making use of the means and instrumentalities of interstate commerce, the mails, or the facilities of a national securities exchange.

DEFENDANTS

7. John R. Felder, age 67, resides in Naples, Florida and is a retired businessman.

8. Jean M. Ruhl, age 61, resides in Lewisburg, Pennsylvania. At all times material to the events described in this Complaint, she was a member of the Conestoga Board of Directors. Ruhl and Felder were friends and professional acquaintances.

FACTS

9. Conestoga Enterprises, Inc. was an integrated communications provider based in Birdsboro, Pennsylvania, which provided local and long-distance telephone services, wireless PCS, Internet access, cable television and communications equipment solutions. At all times material to the events described in this Complaint, its stock was traded on the NASDAQ national market. On May 24, 2002, D&E Communications, Inc., also a telephone and data access provider, acquired Conestoga.

10. NTELOS Inc. is an integrated communications provider with headquarters in Waynesboro, West Virginia. At all times material to the events described in this Complaint, its stock was traded on the NASDAQ national market.

Chronology of Merger Negotiations

11. On February 1, 2001, Conestoga's Board of Directors engaged a financial adviser in order to explore the possible sale of Conestoga or some of its assets. On April 20, 2001, the adviser identified several companies for the Board that appeared to be interested in a merger with Conestoga, and the Board began a process of review and negotiations that would last several months.

12. On May 15, 2001, Conestoga filed a Form 8-K announcing that it had retained the adviser to explore strategic alternatives, including a potential merger or acquisition. This announcement did not include any specific details on potential suitors or pricing, and had little addition effect on Conestoga's stock price, which had climbed from the $15 per share range to $27 per share in the weeks leading up to May 15, 2001.

13. Between April 24, 2001 and July 24, 2001, Conestoga's Board of Directors held three regular and eleven special meetings, at which the merger negotiations were discussed. Ruhl attended all but two meetings, either in person or by telephone.

14. At these Board meetings at which merger negotiations were discussed, Board members, including Ruhl, received detailed information about potential merger partners, including pricing information. Among other things, Board members were informed that five companies, including NTELOS, were interested in purchasing Conestoga.

15. Throughout the merger discussions, members of Conestoga's Board of Directors, including Ruhl, were warned that the discussions were confidential and that disclosure and trading was prohibited.

16. In addition, in October 2000, Conestoga had adopted a written policy regarding insider trading. This policy specifically prohibited insiders, including Board members, from trading Conestoga securities while in possession of material, nonpublic information and from tipping others about such information. Material information was described to include discussions about potential mergers and acquisitions.

17. On May 24, 2001, NTELOS made a non-binding offer to purchase all of the outstanding shares of Conestoga for $34 to $36 per share using a combination of cash and stock. NTELOS's offer constituted a $7 to $9 per share premium over Conestoga's then current market price. Several other companies also made bids.

18. On June 1, 2001, Conestoga's Board met and reviewed the proposals in greater detail, including the one from NTELOS. On June 28, 2001, the Board met to discuss two remaining bids, from NTELOS and another company, D&E Communications, Inc. The process and meetings continued until the Board agreed to accept NTELOS' offer on July 10, and approved the plan of merger on July 24, 2001. Ruhl had knowledge of all of these events.

19. On the morning of July 25, 2001, Conestoga publicly announced that it had signed an agreement to merge with NTELOS. Under the terms of the agreement, Conestoga shareholders would receive approximately $335 million in cash and stock, or $40 per share. This merger was never consummated. In September 2001, Conestoga opted to accept a more favorable offer from D&E Communications, Inc.

20. On July 24, 2001, the last trading day prior to the announcement, the closing price of Conestoga's stock was $31.75 per share. On July 25, 2001, the day of the announcement, Conestoga stock closed at $37 per share on heavy volume, an increase of more than 16 percent from the previous day's closing price.

Felder's Illegal Trading

21. Felder knew Ruhl socially and professionally, knew that she was a member of Conestoga's Board, and spoke with her often during the time of the merger negotiations. In the months leading up to Felder's trading, he and Ruhl spoke often by telephone, including the days surrounding each Board meeting and each of Felder's purchases of Conestoga stock. During at least some of these calls, Felder sought information from Ruhl concerning whether Conestoga was seeking a merger.

22. On June 26 and July 11, 2001, Felder opened two brokerage accounts, which he then used to purchase Conestoga stock. On six separate days between July 2 and July 18, 2001, just prior to the announcement of the merger, Felder purchased a total of 9,200 shares of Conestoga common stock in these accounts, spending almost $272,000. During this time, Conestoga was the only stock he purchased in these new brokerage accounts.

23. On several occasions in June and July, 2001, Ruhl, in breach of her fiduciary duties to Conestoga and its shareholders, and for her direct or indirect personal benefit, conveyed material, nonpublic information concerning the proposed merger to Felder.

24. On six separate days between July 2 and July 18, 2001, Felder then purchased Conestoga stock while he knew or was reckless in not knowing that the information he had received from Ruhl was nonpublic and was disclosed to him in breach of Ruhl's fiduciary duties. Although Felder did not sell his shares on July 25, 2001, he had potential profits of $68,476 from his unlawful trading.

CLAIM

Violations of Section 10(b) of the Exchange Act
and Rule 10b-5 thereunder

25. Paragraphs 1 through 24 are realleged and incorporated herein by reference.

26. As a result of the conduct alleged herein, defendants Felder and Ruhl, in connection with the purchase or sale of securities, directly or indirectly, by use of the means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange: (i) employed devices, schemes, or artifices to defraud; (ii) made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (iii) engaged in acts, practices, and courses of business which operated as a fraud and deceit upon other persons.

27. By reason of the foregoing, defendants Felder and Ruhl violated Section 10(b) of the Exchange Act, 15 U.S.C. §78j(b), and Rule 10b-5, 17 C.F.R. §240.10b-5 thereunder.

WHEREFORE, the Commission respectfully requests that this Court:

I.

Issue an injunction permanently restraining and enjoining defendants Felder and Ruhl from violating Section 10(b) of the Exchange Act, 15 U.S.C. §78j(b), and Rule 10b-5, 17 C.F.R. §240.10b-5, thereunder.

II.

Order defendants Felder and Ruhl to disgorge the unlawful profits realized in connection with their actions, as described in this Complaint, together with prejudgment interest thereon.

III.

Order defendants Felder and Ruhl to pay civil penalties pursuant to Section 21A of the Exchange Act, 15 U.S.C. §78u-1, of up to three times the amount disgorged.

IV.

Issue an order pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. §78u(d)(2), barring defendant Ruhl from serving as an officer or director of any issuer that has a class of securities registered with the Commission pursuant to Section 12 of the Exchange Act, 15 U.S.C. §78l, or that is required to file reports with the Commission pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. §78o(d).

V.

Order such other and further relief as the Court may deem just and appropriate.

Local Counsel:
________________________________
Alexander M. Vasilescu (AV-2575)
Senior Trial Counsel

SECURITIES AND EXCHANGE COMMISSION
The Woolworth Building
233 Broadway
New York, NY 10279
(646) 428-1500

Dated: September 25, 2003

http://www.sec.gov/litigation/complaints/comp18376.htm