U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20726 / September 19, 2008
Securities and Exchange Commission v. Matthew R. Zachowski, Civil Action No. 08 - 8104 (S.D.N.Y. September 19, 2008)
SEC Files Settled Insider Trading Charges Against Former CEO of Public Relations Firm
The Securities and Exchange Commission announced today that it has filed settled insider trading charges against Matthew R. Zachowski, the co-founder and former CEO of a New York public relations firm, for trading in advance of the April 30, 2007 announcement of Eurex Frankfurt A.G.'s $2.8 billion cash merger agreement with International Securities Exchange Holdings, Inc. Zachowski has agreed to settle the Commission's charges without admitting or denying the allegations, and his settlement papers have been submitted to the Court for consideration.
The Commission's complaint, filed in federal court in the Southern District of New York, alleges that Eurex, on or about April 23, 2007, engaged the public relations firm to assist it with the announcement of its agreement to acquire ISE. The complaint further alleges that Zachowski, through his roles as CEO of the firm and administrator of its computer system, learned material, non-public information concerning the ISE acquisition announcement. The complaint further alleges that, on April 27, 2007, the last trading day before the announcement, Zachowski used this material, non-public information in purchasing more than $450,000 worth of ISE stock—and that, following the public announcement, he sold it for illegal profits totaling $194,365.
Zachowski's signed Consent—which is subject to approval by the Court—provides that, without admitting or denying the Commission's allegations, Zachowski would be permanently enjoined against future violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and would pay $194,365 in disgorgement, $6,531 in prejudgment interest, and a $194,365 penalty.
The Commission acknowledges the assistance of the New York Stock Exchange (NYSE) in this matter.