UNITED STATES DISTRICT COURT
Securities and Exchange Commission,
LIANNE GULKIN and STANLEY J. GULKIN,
03 Civ. ____ (___)
Plaintiff, Securities and Exchange Commission ("Commission"), for its Complaint against defendants Lianne Gulkin and Stanley J. Gulkin (collectively "the Gulkins") alleges as follows:
1. This matter involves illegal insider trading by the Gulkins, who bought stock in Hotjobs.com, Inc. ("Hotjobs") in June 2001 while in possession of material, nonpublic information that Hotjobs would be acquired by TMP Worldwide, Inc. ("TMP"). The Gulkins misappropriated this information from an individual who was informed about the acquisition and with whom the Gulkins had a relationship of confidence and trust. After the announcement on June 29, 2001, the Gulkins sold their shares of Hotjobs, generating a total of $16,357 in illicit profits.
2. The Commission brings this action pursuant to the authority conferred upon it by Section 21(d) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78u(d), to enjoin the Gulkins from violating the antifraud provisions of federal securities laws. The Commission also seeks a judgment requiring the Gulkins to disgorge the profits of their fraudulent conduct plus prejudgment interest thereon, and to pay civil penalties pursuant to Section 21A(a) of the Exchange Act, 15 U.S.C. § 78u-1(a), and ordering such other and further relief as the Court may deem appropriate.
3. This Court has jurisdiction over this action, and venue is proper, pursuant to Sections 21(d), 21A and 27 of the Exchange Act, 15 U.S.C. §§ 78u(d), 78u-1(a) and 78aa. The Gulkins, directly or indirectly, used the means and instrumentalities of interstate commerce, of the mails, or of the facilities of a national securities exchange, in connection with the acts, practices and courses of business alleged herein. Certain of the alleged transactions, acts, practices, and courses of business occurred in the Southern District of New York, including, but not limited to, the purchase and sale of securities by telephone.
4. The Gulkins have engaged, and unless enjoined, will continue to engage, directly or indirectly, in transactions, acts, practices or courses of business that constitute violations of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
5. Lianne Gulkin, age 58, was a real estate agent at the time of the conduct alleged herein. She lived in West Caldwell, New Jersey.
6. Stanley J. Gulkin, age 64, was an attorney and certified public accountant at the time of the conduct alleged herein. He lived in West Caldwell, New Jersey and had an office in Livingston, New Jersey.
7. In 1999, TMP approached Hotjobs about a combination of the two competing companies, both of which provided on-line recruiting services for employers. Hotjobs declined, but from time to time thereafter the companies discussed issues relating to the on-line recruiting industry.
8. On or about May 23, 2001, Hotjobs reopened merger discussions with TMP. Between May 31 and June 8, 2001, Hotjobs interviewed investment banking firms and law firms to advise it through the merger transaction.
9. On June 7, 2001, TMP offered to buy Hotjobs for various premiums over the trading price of Hotjobs's common stock, which closed at $6.78 per share that day on the NASDAQ National Market System. Hotjobs responded that the prices initially offered by TMP were insufficient, and TMP raised the offer to $9 per share on June 12, 2001, when the stock closed at $7.46 per share. TMP's offer was contingent on the transaction being completed by June 29, 2001.
10. On June 28, 2001, the companies agreed on the final terms of a merger, including an exchange ratio of .2195 shares of TMP for each share of Hotjobs.
11. On June 29, 2001, after the close of trading, TMP publicly announced that it would acquire Hotjobs in a stock-swap transaction in which each share of Hotjobs would be exchanged for .2195 shares of TMP.
12. Hotjobs's stock price, which closed at $10.51 on Friday, June 29, 2001, jumped to $12.49 per share at the close of the market on Monday, July 2, 2001, and reached $12.57 per share at the close of the market on Tuesday, July 3, 2001.
13. On or about June 8, 2001, an individual with whom the Gulkins shared a relationship of confidence and trust learned material, nonpublic information that Hotjobs was discussing being acquired by another firm. The individual had a fiduciary duty to Hotjobs and its shareholders to maintain the confidentiality of the information.
14. During one or more conversations between June 8, 2001 and June 29, 2001, when the acquisition was publicly announced, the Gulkins learned material, nonpublic information from the individual regarding the impending acquisition of Hotjobs. The Gulkins were aware that the information was confidential.
15. On June 17, 2001, Lianne Gulkin placed an online order for 1,000 shares of Hotjobs. The order was executed at $8.27 per share when the market opened on June 18, 2001.
16. On June 18, 2001 Stanley Gulkin bought 2,000 shares of Hotjobs at $8.37 per share.
17. On June 26, 2001, Stanley Gulkin bought 1,000 shares of Hotjobs at $9.40 per share.
18. On June 29, 2001, Stanley Gulkin bought 1,000 shares of Hotjobs; 800 shares were bought at $10.78 per share and 200 shares were acquired for $10.85 per share. The merger was publicly announced after the market closed on June 29, 2001.
19. On July 3, 2001 the Gulkins sold their Hotjobs positions. Lianne Gulkin sold 1,000 shares for $12.40 per share, profiting $4,130 on the trades. Stanley Gulkin sold 3,900 shares at $12.29 per share, and 100 shares at $12.30 per share, profiting $12,227 on the trades. In the aggregate, the Gulkins profited by $16,357 in their Hotjobs trading.
20. Paragraphs 1 through 19 are realleged and incorporated herein by reference.
21. From at least June 17, 2001 to at least June 29, 2001, the Gulkins, directly or indirectly, singly or in concert, by use of the means or instrumentalities of interstate commerce, the mails, or any facility of any national securities exchange, in connection with the purchase or sale of securities: (1) employed devices, schemes, or artifices to defraud; (2) made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made in light of the circumstances under which they were made, not misleading; and (3) engaged in acts, practices or courses of business which operated, or would operate as a fraud or deceit upon purchasers of the securities, or any other persons.
22. As part of and in furtherance of these violations, and as set forth above, the Gulkins misappropriated material, nonpublic information concerning an impending acquisition of Hotjobs by TMP. The Gulkins executed purchases of Hotjobs securities knowingly or recklessly while in possession of this material, nonpublic information in breach of a fiduciary duty or other duty of confidence and trust that they owed to the individual.
23. By reason of the foregoing, the Gulkins violated, and unless enjoined will again violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
WHEREFORE, plaintiff Commission respectfully requests that this Court enter judgment:
A. Permanently restraining and enjoining the Gulkins, their agents, servants, employees, and attorneys, and all persons in active concert or participation with them who receive actual notice of the injunction by personal service or otherwise, and each of them, directly and indirectly, from violating Section 10(b) of the Exchange Act, 15. U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5;
B. Ordering the Gulkins to disgorge the aggregate ill-gotten gains they derived from the purchase of Hotjobs securities in violation of Section 10(b) of the Exchange Act, 15 U.S.C.§ 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, and to pay prejudgment interest thereon;
C. Ordering the Gulkins to pay a civil penalty, pursuant to Sections 21(d) and 21A of the Exchange Act, 15 U.S.C. § 78u(d)(3) and § 78u-1; and
D. Granting such other and further relief as this Court shall deem just and proper.
Dated: New York, New York
December 4, 2003
__/s/ Wayne M. Carlin
By: WAYNE M. CARLIN (WC-2114)
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York, New York 10279
Tel: (646) 428-1510
Fax: (646) 428-1981
Edwin H. Nordlinger
Mark K. Schonfeld
Caren N. Pennington
Doria G. Bachenheimer
|Home | Previous Page||