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U.S. Securities and Exchange Commission

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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20759 / September 30, 2008

Securities and Exchange Commission v. Samir I. Abed and Elias J. Antoun, Case No. C-08-4549 (HRL) (N.D. Cal. filed September 30, 2008)

SEC Charges Silicon Valley CEO and Friend With Insider Trading

The Securities and Exchange Commission today charged the former President and CEO of Santa Clara, Calif. technology company Genesis Microchip, Inc. with insider trading. The Commission alleges that Elias Antoun, who resides in San Jose, bought Genesis stock in the brokerage accounts of a relative and a friend while in the midst of confidential merger negotiations with STMicroelectronics, one of the world's largest semiconductor companies.

The SEC also charged Antoun's childhood friend, Samir Abed of Thousand Oaks, who purchased Genesis stock and options after learning of the merger negotiations from Antoun. Both Antoun and Abed, who netted profits of approximately $33,975 and $51,206, respectively, when the merger was announced, agreed to settle the SEC's charges without admitting or denying the Commission's allegations.

The Commission's complaint, filed in federal district court in San Jose, alleges that Genesis, a supplier of image processors for flat-panel TVs and monitors, engaged in confidential discussions in the fall of 2007 with Geneva, Switzerland-based STMicroelectronics. Shortly after receiving a letter of intent under which STM would acquire Genesis at a significant premium above Genesis' current stock price, Antoun began purchasing shares of Genesis stock in the brokerage accounts of a relative and a friend. The Commission also alleges that Antoun discussed the pending merger in confidence with his friend Abed; unbeknownst to Antoun, Abed used the information to purchase shares of Genesis stock and call options. After news of the merger was announced on December 11, 2007, Genesis's stock price skyrocketed 57 percent. Shortly thereafter, Antoun sold the Genesis stock in his relative's and friend's accounts, and Abed sold his Genesis stock and options, for thousands of dollars in illicit profits.

Antoun and Abed are both charged with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Both Antoun and Abed have agreed to be enjoined from future violations of the securities laws. Antoun has agreed to pay $37, 299.42 in disgorgement and prejudgment interest (which includes profits from a previous trade prior to a Genesis earnings announcement) and a financial penalty of $36,210. Abed has agreed to pay $53,362.62 in disgorgement and prejudgment interest and a penalty of $25,603. The Commission took into consideration Abed's cooperation during the staff's investigation in accepting his settlement.

The SEC acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in this matter.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/2008/lr20759.htm


Modified: 09/30/2008