U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19929 / November 30, 2006
SEC v. Robert J. Gallivan, Civil Action No. 06-CV-2632-JAH (NLS) (S.D.Ca.)
SEC Charges Robert J. Gallivan With Insider Trading in the Securities of Five California Community Banks
Gallivan Agrees to Pay $338,000 to Settle Charges
The Securities and Exchange Commission ("Commission") today filed an insider trading complaint against Robert J. Gallivan ("Gallivan") of Cardiff-by-the-Sea, California, alleging that over a 17-month period during 2002 and 2003, Gallivan violated the federal securities laws by serially purchasing, and/or recommending that friends and relatives purchase, the securities of five California community banks after learning material, nonpublic information regarding the proposed acquisition of each of these banks.
The Commission's complaint alleges that:
Without admitting or denying the allegations in the complaint, Gallivan has agreed to pay a total of $338,000, consisting of: (1) $106,711 in disgorgement of illegal profits from his trading and that of his friends and relatives, (2) $17,867 in prejudgment interest, and (3) a civil penalty of $213,422, equal to two times the total illicit profits. Finally, he also has consented to the entry of a Final Judgment that permanently enjoins him from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, which are antifraud provisions of the federal securities laws. The settlement is subject to approval by the United States District Court for the Southern District of California.
In a separate matter, the United States Attorney's Office for the Southern District of California today filed criminal charges against Gallivan with respect to his trading and/or recommending that others trade in the securities of four of the community banks. Gallivan entered a guilty plea to four counts of securities fraud regarding purchases made in Valencia, Monterey, Sun Country and Harbor stock.
The Commission's investigation that led to these actions was conducted in cooperation with the United States Attorney's Office for the Southern District of California and the Federal Bureau of Investigation, which conducted their own separate, parallel investigation. The Commission also acknowledges the assistance provided by NASD Regulation Inc. in connection with this matter.