U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20013 / February 22, 2007
SEC v. Luiz Gonzaga Murat Júnior, C.A. No. 1:07CV00381 (D.D.C.) (PLF)
SEC v. Alexandre Ponzio De Azevedo, C.A. No. 1:07CV00380 (D.D.C.) (PLF)
SEC Files Settled Insider Trading Charges Against Former Sadia S.A. Chief Financial Officer and Former Investment Banker at ABN AMRO Real S.A.
The Securities and Exchange Commission today filed settled civil actions in the United States District Court for the District of Columbia against (i) Luiz Gonzaga Murat Júnior, former Chief Financial Officer and Director of Investor Relations at Sadia S.A. ("Sadia"), a Brazilian food products company, and (ii) Alexandre Ponzio De Azevedo, a former employee of Banco ABN AMRO Real S.A. ("ABN AMRO"), an investment banking firm retained by Sadia. Each defendant is alleged to have engaged in insider trading by purchasing securities of Perdigão S.A. ("Perdigão") prior to Sadia's tender offer for Perdigão, which was announced on July 16, 2006. Without admitting or denying the allegations, Murat and Azevedo have each consented to the entry of a final judgment imposing injunctive and monetary relief. Murat has also consented to be barred from acting as an officer or director of a publicly traded company for a period of five years.
The Commission's complaint against Murat alleges that on April 7, 2006, representatives of an investment bank met with Murat and another Sadia executive to propose that Sadia make a tender offer for Perdigão. According to the complaint, Murat proceeded to purchase American Depositary Shares ("ADSs") of Perdigão both later the same day and subsequently on June 29, 2006, on the basis of material, nonpublic information concerning the proposed acquisition, and in breach of a duty of trust and confidence he owed to Sadia. The complaint alleges that Murat's holdings totaled 45,900 ADSs of Perdigão by the time Sadia announced the tender offer. On July 17, 2006, the price of Perdigão ADSs increased to $24.50, up $4.25 (21%) from the previous closing price. According to the complaint, Murat had imputed illicit profits of $180,404 from his unlawful trading.
The Commission's complaint against Azevedo alleges that he learned of the possible tender offer on April 11, 2006, in his capacity as an employee of ABN AMRO assigned to the tender offer financing team, and that ABN AMRO later placed Perdigão on a list of securities in which ABN AMRO employees could not trade. According to the complaint, Azevedo subsequently purchased 14,000 ADSs of Perdigão on June 20, 2006, on the basis of material, nonpublic information concerning the proposed acquisition, and in breach of a duty of trust and confidence he owed to ABN AMRO. Azevedo sold 10,500 ADSs on July 17, 2006, one day after Sadia had publicly announced its tender offer for Perdigão. According to the complaint, Azevedo realized illicit profits of $52,290 on the 10,500 ADSs he sold on July 17 and had imputed profits of $14,875 on his remaining 3,500 ADSs.
Without admitting or denying the allegations in the respective complaints, both defendants have agreed to settle the Commission's charges by consenting to the entry of final judgments that would permanently enjoin them from further violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-3 thereunder. The final judgment against Murat also would (i) bar him for a period of five years from serving as an officer or director of a publicly traded company, (ii) require him to pay $184,028.12 in disgorgement and prejudgment interest, and (iii) order him to pay a civil penalty of $180,404. The final judgment against Azevedo also would (i) require him to pay $68,215.45 in disgorgement and prejudgment interest, and (ii) require him to pay a civil penalty of $67,165. Azevedo has also consented to the Commission's entry of an order, following the Court's anticipated entry of an injunction against him, which would bar him pursuant to Section 15(b)(6) of the Exchange Act from association with a broker or dealer, with a right to reapply after three years.
The Commission wishes to acknowledge the assistance of the Brazilian Comissão de Valores Mobilários. The Commission's investigation in this matter is continuing.