U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19665 / April 24, 2006
SEC v. David N. Anderson and Nancy C. Dipietro, Civil Action No. 3:06 CV 196 (W.D.N.C.)
Securities and Exchange Commission Files Action Against Senior Vice President of LendingTree and His Tippee for Illegal Insider Trading
U.S. Attorney for the Western District of North Carolina Charges Senior Vice President of LendingTree With Obstruction of Justice, Witness Tampering, and Making False Statements
The Securities and Exchange Commission announced today that it filed an insider trading complaint in the United States District Court for the Western District of North Carolina against David N. Anderson, Senior Vice President and General Manager of LendingTree settlement services, and Nancy C. Dipietro, Anderson's close friend and former business associate. LendingTree is a financial services company based in Charlotte, North Carolina. The Commission's complaint alleges that, shortly before the May 5, 2003, public announcement that LendingTree was being acquired by USA Interactive at a substantial premium to LendingTree shareholders (the "Announcement"), Anderson improperly provided material nonpublic information concerning the pending acquisition to three friends and colleagues at LendingTree Michael J. Ricks, John H. Woody, and Mark P. Mead as well as to a friend outside the company, Dipietro. The complaint alleges that Anderson's tippees then purchased shares of LendingTree while in possession of this material nonpublic information. The complaint further alleges that after the Announcement, the price of LendingTree stock soared, and Anderson's tippees made nearly $220,000 in illegal profits.
The complaint alleges that Anderson violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder, by improperly tipping Ricks, Woody, Mead, and Dipietro with material, nonpublic information concerning the pending acquisition, and that Dipietro violated Exchange Act Section 10(b), and Rule 10b-5 thereunder, by trading on that information. The Commission's complaint seeks, among other things, permanent injunctive relief, disgorgement of profits plus prejudgment interest and the imposition of civil money penalties. In addition, the Commission's complaint seeks an officer and director bar against Anderson.
The Commission previously filed and settled an insider trading case against Ricks, Woody, Mead, see SEC v. Ricks, Woody, and Mead, No. 3:04CV576 (W.D.N.C. Nov. 22, 2004)/Lit. Rel. No. 18983, and has filed insider trading cases against other individuals in connection with this investigation. See SEC v. Paquette and Lawrence, No. 3:05CV412 (W.D.N.C. Sept. 26, 2005)/Lit. Rel. No. 19393; SEC v. Talbot, No. CV 04-4556 (C.D. Cal. June 24, 2004)/Lit. Rel. No. 18762; and SEC v. Bartlett, No. 3:03CV463 (W.D.N.C. Sept. 24, 2003)/Lit. Rel. No. 18361.
In a related criminal case, the U.S. Attorney's Office for the Western District of North Carolina announced today that Anderson has been charged in a six count indictment with, among other charges, felony obstruction of justice, witness tampering, and making false statements, in connection with the Commission's investigation. The Commission wishes to thank the U.S. Attorney's Office for its assistance with this matter.
The Commission's investigation continues.