U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20623 / June 18, 2008
SEC v. Robert W. Tedder, et al., Civil Action No. 3:08-CV-1013-G, United States District Court for the Northern District of Texas (Dallas)
SEC Charges Five Individuals With Insider Trading in Connection With Aviall, Inc.'s Merger Announcement
The Securities and Exchange Commission announced today that it has filed a complaint against Robert Wayne Tedder, Joseph Wayne Tedder, Phillip Brian Gunn, Gregory Carl Gunn, and Brian Patrick Carr (Defendants) in the United States District Court for the Northern District of Texas alleging that they engaged in unlawful trading on the basis of material, nonpublic information in the securities of Aviall, Inc. (Aviall) before a May 1, 2006 merger announcement with The Boeing Company. According to the Commission's complaint, two Aviall employees, Robert Tedder and Brian Carr, became aware of material, nonpublic information concerning the impending acquisition of Aviall in the course of their employment at Aviall's Dallas headquarters. The complaint also alleges that Robert Tedder tipped his father, Joseph Wayne Tedder, and a business associate, Phillip Gunn. Finally, the complaint alleges that Phillip Gunn passed on the material, nonpublic information concerning the acquisition of Aviall to his brother, Gregory Gunn, a registered representative.
In its complaint, the Commission alleges that, between March 21, 2006 and April 28, 2006, the Defendants purchased Aviall common stock and Aviall call option contracts while in possession of nonpublic information related to the acquisition of Aviall. On the day of the merger announcement, Aviall's common stock closing price of $46.96 was nearly 25% higher than the preceding day's closing price of $37.70. As a result of their trading in Aviall common stock and call options, the Defendants collectively reaped hundreds of thousands of dollars in profits.
The Commission acknowledges the assistance of the Philadelphia Stock Exchange for its cooperation in this matter.