U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19816 / August 30, 2006
SEC v. Stewart P. "Tom" Mitchell, Civil Action File No. 4:06 CV 109 (RAJ)
Stewart P. "Tom" Mitchell, Former CFO of Ferguson Enterprises, Enjoined in Insider Trading Scheme Involving Shares of Noland Company
On August 30, 2006, the Securities and Exchange Commission filed an insider trading complaint against Stewart P. "Tom" Mitchell of Newport News, Virginia. Mitchell, 56, is the former chief financial officer of Ferguson Enterprises. The Commission's complaint, which was filed in the United States District Court for the Eastern District of Virginia, Newport News Division, alleges that Mitchell, while in possession of material nonpublic information concerning a possible tender offer by Ferguson and other suitors of Noland Company, purchased 1,454 shares of Noland in his own account and accounts that he controlled of two of his sons between January and April of 2005. Although Ferguson ultimately did not bid on Noland, the price of Noland shares increased by more than 50 percent after another suitor publicly announced its winning bid in April 2005. Mitchell, who had signed a confidentiality agreement with Noland and had supervised Ferguson's due diligence, thereafter sold all shares that he had purchased, resulting in illegal insider trading profits of $35,214.
Without admitting or denying the allegations in the complaint, Mitchell consented to the entry of a proposed final judgment, pending approval by the court, that would permanently enjoin him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Mitchell also agreed to disgorge $35,214, plus $2,378 in prejudgment interest, and to pay a one-time civil penalty of $35,214, for a total payment of $72,806.
The Commission acknowledges the assistance provided by the NASD in connection with this matter.