U.S. Securities and Exchange Commission
Litigation Release No. 21990 / June 6, 2011
Securities and Exchange Commission v. Dean A. Goetz, Case No. 11CV1220-IEG-NLS (S.D. Cal. June 3, 2011)
SEC CHARGES CALIFORNIA LAWYER WITH INSIDER TRADING
On June 3, 2011, the Securities and Exchange Commission charged Dean A. Goetz with insider trading in the securities of Advanced Medical Optics, Inc. (NYSE: EYE) in advance of the January 12, 2009 announcement that Abbott Laboratories, Inc. would acquire Advanced Medical Optics in a tender offer. Goetz traded based on material, nonpublic information regarding the impending merger and acquisition involving Advanced Medical Optics that he misappropriated from his daughter, a lawyer who, at the time, worked for the law firm representing Advanced Medical Optics in the transaction. Goetz and his daughter shared a relationship of trust and confidence. Unbeknownst to his daughter, Goetz misappropriated confidential deal information from her while she worked on the transaction at her parents’ house over the holidays in December 2008. By trading on the material, nonpublic information he misappropriated, Goetz breached the duty of trust and confidence that he owed to his daughter.
The Commission’s complaint alleges that Goetz, a California resident and an attorney, knew that his daughter owed a duty of confidentiality to her employer and to her employer’s clients. Despite knowing that his daughter could not, and did not, share nonpublic information with him, Goetz misappropriated information about the impending merger and acquisition and used it for his own benefit. The complaint further alleges that on January 8, 2009 – shortly before the market was to close on the day the deal was originally scheduled to be announced – Mr. Goetz bought 900 shares of Advanced Medical Optics through an online brokerage account he had not accessed in almost a year. As a result of his trading, Goetz earned illegal profits of $11,418.
Without admitting or denying the SEC’s allegations, Goetz agreed to settle the charges against him. The settlement is subject to approval by the court. Specifically, Goetz consented to the entry of a final judgment permanently enjoining him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder and ordering him to pay full disgorgement of $11,418, plus prejudgment interest of $925.65, and a penalty of $11,418, for a total of $23,761.65.