U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20419 / January 2, 2008
SEC v. Mitchell S. Drucker and Ronald Drucker, Defendants, and William Minerva, Relief Defendant, 06 Civ. 1644 (SDNY) (CM)
Final Judgment Entered Against Defendant Mitchell S. Drucker, Imposing Permanent Injunctions and Officer and Director Bar, Ordering Disgorgment and Prejudgment Interest, and Imposing a Civil Penalty; Final Judgments Also Entered Against Defendant Ronald Drucker and Relief Defendant William Minerva
On Wednesday, December 26, 2007, a Manhattan federal court entered final judgments against defendants Mitchell S. Drucker and Ronald Drucker, and relief defendant William Minerva. The judgments follow the jury verdict on December 3, 2007 in favor of the U.S. Securities and Exchange Commission finding the defendants liable for insider trading in the stock of NBTY, Inc. Mitchell Drucker is the former associate general counsel of NBTY, Inc., a nutritional supplements manufacturer and retailer, and his father, Ronald Drucker, is a former New York City police detective. The Commission had charged that, while Mitchell Drucker was a lawyer at NBTY, and had learned that NBTY was about to announce lower than expected quarterly earnings, he and his father sold their holdings of NBTY stock just before the negative announcement. Collectively, the defendants avoided $197,243 in losses by selling in advance of the announcement.
The judgment against defendant Mitchell Drucker permanently enjoins him from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and bars him from serving as an officer and director of any public company. The judgment also orders defendant Mitchell Drucker to pay disgorgement and prejudgment interest totaling $201,146, to pay, and be jointly and severally liable with his father, defendant Ronald Drucker for, disgorgement and prejudgment interest totaling $74,411, and to pay, and be jointly and severally liable with his friend, relief defendant William Minerva for, disgorgement and prejudgment interest totaling $11,577. Finally, the judgment orders Mitchell Drucker to pay a civil penalty of $394,486, representing two times the combined ill-gotten gains obtained by defendants Mitchell Drucker and Ronald Drucker, and relief defendant Minerva.
The judgment against defendant Ronald Drucker permanently enjoins him from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and orders him to pay, and be jointly and severally liable with his son, defendant Mitchell Drucker for, disgorgement and prejudgment interest totaling $74,411.
The judgment against relief defendant William Minerva orders him to pay, and be jointly and severally liable with his friend, defendant Mitchell Drucker for, disgorgement and prejudgment interest totaling $11,577.
In making findings for the judgments, United States District Judge Colleen McMahon issued on December 20, 2007, her Decision On Relief, in which she found, among other things, that Mitchell Drucker "perjured himself during the trial." That same decision stated, among other things, that the Court is "convinced, by the brazenness of his misconduct and by his cocky refusal to own up to it, that this attorney [Mitchell Drucker] — who was supposed to be NBTY's 'policeman,' and who demonstrated utter indifference to both the law and to his client — is not fit to participate in the governance of any public company." (footnote omitted).