U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21935 / April 18, 2011
Securities and Exchange Commission v. Gianluca Di Nardo, et al., U.S. District Court for the Southern District of New York, Civil Action No. 08-cv-6609 (PAC) (S.D.N.Y. July 25, 2008)
ITALIAN TRADERS AND RELATED ENTITIES AGREE TO PAY $1.46 MILLION TO SETTLE INSIDER TRADING CHARGES
The Securities and Exchange Commission today announced a proposed settlement with two Italian citizens, Oscar Ronzoni and Paolo Busarḍ, their investment vehicle, Tatus Corp. (“Tatus”), and another related entity, A-Round Investment SA (“A-Round”), for alleged insider trading in the securities of DRS Technologies, Inc. (“DRS”). In October 2010, the Commission amended its Complaint in its previously-filed action against unknown purchasers of DRS and American Power Conversion Corp. (“APCC”) call options to name these defendants, in addition to two others who have previously settled with the Commission. Ronzoni, Busardo, and their related entities have agreed to settle the Commission’s charges by, among other things, paying approximately $1.46 million in disgorgement and penalties.
In its October 2010 Amended Complaint, the Commission alleges that Ronzoni, Busarḍ, Tatus, and A-Round purchased DRS call options that were out-of-the-money and set to expire in the near term while in possession of material, nonpublic information concerning the acquisition of DRS. According to the Amended Complaint, the settling defendants purchased the DRS call options in advance of a May 8, 2008 Wall Street Journal article reporting advanced merger negotiations between Finmeccanica S.p.A. and DRS, and confirmation by DRS the same day that it was engaged in talks regarding a potential strategic transaction. On May 5 and 6, 2008, Ronzoni purchased a total of 340 DRS call options; on May 7, 2008, Ronzoni also purchased, through Tatus, 800 DRS call options; and, on May 7, 2008, Busarḍ through A-Round purchased a total of 130 DRS call options. Following the May 8th Wall Street Journal article, Ronzoni made a profit of $156,400, Tatus made a profit of $695,459.97, and Busarḍ, through A-Round, made a profit of $115,840 after liquidating their DRS call option stakes.
Under the terms of the proposed settlement, Ronzoni, Busarḍ, Tatus, and A-Round would consent, without admitting or denying the allegations of the Amended Complaint, to the entry of final judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering them to be jointly and severally liable for the payment of $967,699.97 in disgorgement, $8,689 in prejudgment interest, and a civil penalty of $483,849.99. The settlement remains subject to the approval of the U.S. District Court for the Southern District of New York. If approved, the settlement would bring this litigation to a close and bring the total disgorgement and penalties collected in this civil action to approximately $4.4 million. For more information, please see Litigation Release Nos. 20654 (July 25, 2008) and 21687A (October 7, 2010).
The SEC acknowledges the assistance of the U.S. Department of Justice, the Options Regulatory Surveillance Authority, the Swiss Financial Market Supervisory Authority, and the Swiss Federal Office of Justice in this matter.