Matthew Roszak, et al.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19722 / June 9, 2006
SEC v. Matthew Roszak, et al., Civil Action No. 06C-3166-Castillo (N.D. Ill.) (June 8, 2006)
SEC Charges Five Individuals With Insider Trading In Connection With Blue Rhino Corp.'s Merger Announcement
Four Defendants Agree to Settlements Including Permanent Injunctions and Payment of Disgorgement and Civil Penalties Totaling Over $432,000
The Securities and Exchange Commission (Commission) announced today that it has filed a complaint against Matthew Roszak, Douglas Jozwiak, Darrin Edgecombe, Trifon Beladakis and Mark Michel in the United States District Court for the Northern District of Illinois alleging that they engaged in unlawful trading on the basis of material non-public information in the securities of Blue Rhino Corp. (Blue Rhino) before a February 9, 2004 merger announcement with Ferrellgas Partners, LP. The complaint alleges that Roszak, the chief financial officer of a company owned by a Blue Rhino director, misappropriated material non-public information from the director about the pending merger and traded on that information. The complaint also alleges that on January 29, 2004, Roszak misappropriated further material non-public information, specifically, that the pending merger was imminent, and unlawfully tipped Jozwiak, Edgecombe and two other individuals who all purchased large amounts of Blue Rhino stock the next day on the basis of that information.
According to the complaint, on January 29, 2004, Edgecombe unlawfully tipped Beladakis and Michel about the Blue Rhino merger negotiations, both of whom purchased Blue Rhino stock on the basis of that information. The complaint alleges that Michel, a registered representative with Wachovia Securities, LLC (Wachovia Securities), initially purchased $90,000 of Blue Rhino stock for himself based on the non-public information and later borrowed $70,000 from a client, in violation of Wachovia Securities policy, to buy additional shares of Blue Rhino stock on the day before the merger announcement. In addition to his own stock purchases, Michel purchased more that $1.2 million of Blue Rhino stock on behalf of his relatives and customers at Wachovia Securities.
Roszak, Jozwiak, Edgecombe and Beladakis have each consented, without admitting or denying the allegations in the Complaint, to final judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, to settle the charges against them, Roszak, Edgecombe and Beladakis have agreed to pay disgorgement, plus prejudgment interest thereon, and civil penalties totaling $240,740, $114,805 and $62,353, respectively. To settle charges against him, Jozwiak agreed to pay a civil penalty in the amount of $14,136.
The Commission thanks the National Association of Securities Dealers and the Chicago Board Options Exchange for their cooperation in this matter.
The Commission's investigation in this matter is ongoing.
