U.S. Securities and Exchange Commission
LITIGATION RELEASE NO. 21799 / January 6, 2011
SEC v. ALFRED S. TEO, SR., ET AL., Civil Action No. 04-CV-1815 (SDW) (MCA) (D.N.J.)
COURT ENTERS FINAL JUDGMENT AGAINST INSIDER TRADING DEFENDANT MITCHELL L. SACKS
The Securities and Exchange Commission today announced that on January 3, 2011, Judge Susan D. Wigenton entered a final judgment against defendant Mitchell L. Sacks ("Sacks"), enjoining him from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment also ordered Sacks to disgorge $115,155 plus $85,919.62 in prejudgment interest and to pay a civil penalty of $115,155. Sacks consented to entry of this judgment without admitting or denying the allegations in the Commission's complaint.
The SEC's complaint, filed on April 22, 2004, charged Sacks with insider trading in the securities of C-Cube Microsystems, Inc. ("C-Cube"). Specifically, the complaint alleges that defendant Alfred S. Teo, Sr. ("Teo"), a former director of Cirrus Logic, Inc., which had been negotiating to take over C-Cube, misappropriated material, non-public information about the contemplated acquisition of C-Cube and subsequently tipped Sacks about the potential deal. The complaint further alleges that Sacks purchased C-Cube shares prior to the March 26, 2001 public announcement of C-Cube's acquisition by another company and that Sacks shortly thereafter sold those shares at a profit of $115,155. In addition to insider trading in C-Cube by Teo and Sacks, the complaint also alleges: (i) insider trading in the stock of Musicland Stores Corporation based on material, non-public information Teo provided to several other defendants regarding Musicland's acquisition by Best Buy Corporation in December 2000; and (ii) the filing of false and misleading Schedules 13D and other filings regarding the Musicland holdings of Teo and the MAAA Trust, a trust for Teo's children.
Between 2004 and 2007, the Court entered consent judgments against the tippee defendants charged with insider trading in Musicland stock, and in 2010, entered a consent judgment against Teo with respect to his charged insider trading in Musicland and C-Cube stock. The Commission's action against Teo and the MAAA Trust based on the false filing charges continues.