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U.S. Securities and Exchange Commission


Litigation Release No. 21008 / April 21, 2009

Securities and Exchange Commission v. Joseph J. Queri, Jr., Gary M. Gosson, et al., Case No. 2:08-CV-01361-AJS (W.D. Penn.)

Securities and Exchange Commission v. Joseph J. Queri, Jr., Joseph J. Queri, Sr., et al., Case No. 2:08-CV-01367-AJS (W.D. Penn.)

SEC Settles Charges Against Two More Individuals In Related Insider Trading Cases

The Securities and Exchange Commission today announced that on April 17, the Honorable Arthur J. Schwab, U.S. District Court Judge for the Western District of Pennsylvania entered Final Judgments against Joseph J. Queri, Jr., a resident of Pittsburgh, Pennsylvania, and Kyle D. Kaczowski, a resident of Las Vegas, Nevada, in two separate district court cases. The Commission charged them, and fourteen other defendants, with insider trading in advance of Dick's Sporting Goods Inc.'s June 21, 2004 announcement that it intended to acquire Galyan's Trading Company, Inc. via a tender offer. Queri Jr. and Kaczowski agreed to the judgments. The Commission has now settled with eleven of the sixteen defendants. The complaints, which the SEC filed on September 30, 2008, alleged:

  • Queri, Jr., who was Dicks' Senior Vice President of Real Estate, tipped his close friend, Gary Gosson, and his father, Joseph Queri, Sr., about the acquisition.

  • Gosson, a resident of Syracuse, New York, tipped nine friends who all bought shares of Galyans stock. Gosson traded through Defendant Gary Camp's brokerage account and shared profits with Michael Santaro and Joseph Federico. These four defendants collectively profited $218,027.

  • Queri, Sr., a resident of Las Vegas, Nevada, tipped six friends, including Kaczowski. Kaczowski traded and profited $20,193.00. He also tipped two friends who bought Galyans stock and profited a total of $9,940.00.

  • The trading connected to Queri, Jr.'s tips resulted in over $600,000 in illegal trading profits.

The day after the public announcement, Galyan's stock closed at $16.68, a 50.3% increase from the previous day's closing price of $11.10.

Without admitting or denying the allegations in the complaint, Queri, Jr. and Kaczowski consented to the entry of a Final Judgment in which they are permanently enjoined from future violations of the antifraud provisions of the securities laws, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Queri, Jr. also agreed to pay disgorgement of $1.00, to preserve the Commission's ability to establish a fair fund, and to pay a one-time civil penalty for tipping in the amount of $218,026.00. Kaczowski agreed to pay disgorgement of $20,193.00, plus prejudgment interest of $6,661.07, and a civil penalty for trading and tipping two friends in the amount of $30,133.00.

For additional information, please see Litigation Release Nos. 20765 (October 1, 2008) and 20895 (February 10, 2009).



Modified: 04/21/2009