U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21392 / January 22, 2010
Securities and Exchange Commission v. Avi Fogel, United States District Court for the District of Massachusetts, Civil Action No. 1:10-CV-10097 (D. Mass. January 22, 2010)
FORMER EMC EXECUTIVE TO PAY MORE THAN $390,000 TO SETTLE INSIDER TRADING CHARGE
The Securities and Exchange Commission today filed a settled injunctive action in the United States District Court for the District of Massachusetts, alleging that Avi Fogel, a former EMC Corp. executive, made more than $190,000 in illicit profits when he engaged in insider trading in the common stock of Document Sciences Corp., prior to the announcement on December 27, 2007 that EMC would acquire Document Sciences.
The Commission’s Complaint alleges the following:
From June 2006 to approximately February 2008, Fogel was a Vice President of strategic initiatives at EMC, and in that role led the team which ultimately decided on an acquisition of Document Sciences.
Fogel recommended to colleagues that EMC acquire Document Sciences through at least late August of 2007. Fogel subsequently remained in contact with certain high-level Document Sciences executives, and knew of EMC’s initial letter of intent to acquire Document Sciences and EMC’s plans to submit a higher revised bid for Document Sciences. On November 16, 2007, Fogel emailed a high-ranking Document Sciences executive what Fogel termed a “due diligence question” about one of Document Sciences’ customers. On November 23, 2007, Fogel forwarded the response from the Document Sciences’ executive to an EMC colleague working on the acquisition of Document Sciences.
Between November 23 and November 30, 2007, Fogel purchased 20,000 shares of Document Sciences common stock for prices ranging from $8.35 to $8.40. Then, two trading days before the public announcement of the deal, Fogel acquired an additional 10,000 Document Sciences common shares for $8.22 per share on December 24, 2007. Fogel later sold all 30,000 shares of his Document Sciences common stock after the public announcement of the acquisition, on February 28, 2008.
Fogel has consented, without admitting or denying the allegations of the Commission’s Complaint, to the entry of a final judgment permanently enjoining him from violating the antifraud provisions of the Securities Exchange Act of 1934, specifically Section 10(b) and Rule 10b-5 thereunder. As part of the proposed settlement, Fogel also has agreed to pay disgorgement of $191,363, prejudgment interest of $14,639.62, and a civil penalty of $191,363. The settlement is subject to the approval of the U.S. District Court for the District of Massachusetts.
The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (“FINRA”).
The Commission’s investigation is ongoing.
See Also: SEC Complaint