U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20157 / June 19, 2007

SEC v. Romano Ancelmo Fontana Filho, C.A. No. 1:07CV01095 (PLF) (D.D.C.)

SEC Files Settled Insider Trading Charges Against Former Director of Sadia S.A.

The Securities and Exchange Commission today filed a settled civil injunctive action in the United States District Court for the District of Columbia against Romano Ancelmo Fontana Filho, a former Director at Sadia S.A. ("Sadia"), a Brazilian food products company. The Commission charged Fontana with engaging in illegal insider trading both by purchasing securities of Perdig£o S.A. ("Perdig£o") prior to Sadia's tender offer for Perdig£o and by selling the same securities of Perdig£o prior to Sadia's subsequent revocation of the tender offer. Without admitting or denying the allegations in the Commission's complaint, Fontana has consented to the entry of a final judgment imposing injunctive and monetary relief and barring him from acting as an officer or director of a publicly traded company for a period of five years.

The Commission's complaint alleges that Fontana learned of the contemplated tender offer on April 26, 2006, through a conversation with the chairman of Sadia's board of directors. According to the complaint, Fontana subsequently purchased 18,000 American Depositary Shares ("ADSs") of Perdig£o at an average cost of $19.12 per ADS through three transactions executed between July 5 and 12, 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. On Sunday, July 16, 2006, Sadia announced the tender offer for Perdig£o. The following day, the price of Perdig£o ADSs increased to $24.50, up $4.25 (21%) from the previous closing price. On the morning of July 21, 2006, Fontana participated by conference call in a meeting at which Sadia's board of directors decided to revoke the tender offer. As the complaint alleges, after this meeting â€" but before Sadia announced the revocation later that day â€" Fontana sold all 18,000 ADSs of Perdig£o at an average selling price of $26.85 per ADS. By selling in advance of the public announcement of the revocation, the complaint alleges, Fontana again engaged in illegal insider trading, in breach of a duty of trust and confidence he owed to Sadia. The complaint alleges that Fontana realized ill-gotten profits of $139,114.50 from his unlawful trading.

Without admitting or denying the allegations in the complaint, Fontana has agreed to settle the Commission's charges by consenting to the entry of a final judgment that would: (i) permanently enjoin him 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; (ii) require him to pay $142,848.95 in disgorgement and prejudgment interest; (iii) order him to pay a 1.25-time civil penalty of $173,893.13; and (iv) bar him for a period of five years from serving as an officer or director of a publicly traded company.

The Commission wishes to acknowledge the assistance of the Brazilian Comiss£o de Valores Mobil¡rios. This is the third settled insider trading action filed by the Commission arising out of Sadia's tender offer for Perdig£o. See SEC v. Luiz Gonzaga Murat Jºnior, C.A. No. 1:07CV00381 (PLF) (D.D.C.) (filed Feb. 22, 2007), Litigation Release No. 20013 (Feb. 22, 2007); SEC v. Alexandre Ponzio De Azevedo, C.A. No. 1:07CV00380 (PLF) (D.D.C.) (filed Feb. 22, 2007), Litigation Release No. 20013 (Feb. 22, 2007). The Commission's investigation in this matter is continuing.

SEC Complaint in this matter