U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19845 / September 26, 2006

SEC v. Graham J. Lefford, 06-CIV-7716 (DAB) (SDNY)

SEC Charges Former Butler To Entertainment Industry Entrepreneur With Illegal Insider Trading

On September 26, 2006, the Commission filed a civil injunctive action in the United States District Court for the Southern District of New York charging Graham J. Lefford with illegal insider trading in the securities of Sports Entertainment Enterprises, Inc. ("SPEA") while in possession of material, nonpublic information concerning his former employer's corporate acquisition of SPEA.

The Commission's complaint alleges that at the time of his unlawful insider trading, Lefford, age 44, was employed as the house manager for the South Hampton, New York residence of Robert F. X. Sillerman, a leading entertainment industry entrepreneur. In the summer of 2004, Sillerman was in the process of acquiring a controlling interest in SPEA, then a dormant public shell company, to use it as the vehicle for acquiring and exploiting the commercial rights to Elvis Presley's name and likeness, which he was negotiating to obtain from the Presley estate. Lefford found out about Sillerman's acquisition of SPEA from one or more of the several deal-related documents that were faxed between Sillerman's office in Manhattan and his South Hampton residence that summer. Within minutes of faxing Sillerman's signed authorization for the SPEA acquisition back to Sillerman's office, Lefford bought 5,000 shares of SPEA stock at 12 cents per share. The price of SPEA stock shot up by over 9,000 % after Sillerman's acquisition of SPEA and the Presley deal were both announced in December 2004, and Lefford made $48,525 in total profit on his $600 investment when he later sold all his SPEA stock. Lefford's use of the confidential information he obtained about the SPEA acquisition to trade securities for his own benefit breached an express duty of trust and confidence that he owed to Sillerman under a written confidentiality agreement that covered all information that Lefford learned about, among other things, Sillerman's business and financial affairs.

The Commission's complaint charges Lefford with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission is seeking a permanent injunction prohibiting Lefford from committing future violations of the above provisions of the securities laws, disgorgement of ill-gotten gains plus pre-judgment interest and civil penalties.

SEC Complaint in this matter