U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20040 / March 14, 2007
SEC v. Melvyn C. Goldstein, 07 Civ. 2199 (TPG) (S.D.N.Y.)
SEC Files Settled Insider Trading Charges Against Former Del Laboratories, Inc. Chief Financial Officer
The Securities and Exchange Commission today announced that it filed a settled civil action in federal district court against Melvyn Charles Goldstein (Goldstein), alleging insider trading in the common stock of Del Laboratories, Inc. (Del), a manufacturer of cosmetics and over-the-counter pharmaceuticals. The settlement is subject to Court approval.
The Commission's complaint, filed in the U.S. District Court for the Southern District of New York, charges Goldstein with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint alleges that Goldstein unlawfully traded in the securities of Del, while in possession of material non-public information, one week prior to the announcement on July 2, 2004, that two companies had reached a definitive agreement to acquire Del. According to the complaint, Goldstein learned, while working at Del as a consultant in Del's Finance Department, that Del was in sales negotiations and would soon announce its plans to be acquired. Goldstein had previously been Del's Chief Financial Officer for sixteen years. By trading in advance of the public announcement of the acquisition agreement, Goldstein stood to profit by $38,308.
Without admitting or denying the allegations in the complaint, Goldstein consented to entry of a final judgment, permanently enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and prohibiting him from serving as an officer or director of any publicly traded company. The final judgment against Goldstein also requires him to pay disgorgement of $38,308 plus prejudgment interest of $4,882.31 and a civil penalty of $38,308, for a total of $81,498.31.