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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21999 / June 14, 2011

SEC v. Lanexa Management LLC and Thomas C. Hardin, Civil Action No. 10-CV-8599 (S.D.N.Y.) (RJS)

Former Lanexa Management Managing Director Thomas C. Hardin Settles SEC Insider Trading Charges

The Securities and Exchange Commission announced today that on April 25, 2011, The Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York, entered a judgment against Thomas C. Hardin in SEC v. Lanexa Management LLC and Thomas C. Hardin, 10-CV-8599, an insider trading case the SEC filed on November 12, 2010. The SEC charged Hardin, who was a managing director at the New York-based hedge fund investment advisor Lanexa Management LLC during the relevant time period, with using inside information to trade ahead of the September 28, 2007 announced acquisition of 3Com Corp.

In its complaint, the SEC alleged that Arthur Cutillo and Brien Santarlas, two former attorneys with the international law firm of Ropes & Gray LLP, misappropriated from their law firm material, nonpublic information concerning the acquisition of 3Com, and tipped the inside information, through another attorney, to Zvi Goffer, a former proprietary trader at Schottenfeld Group LLC, in exchange for kickbacks. The SEC further alleged that Goffer tipped the inside information to Gautham Shankar, a fellow proprietary trader at Schottenfeld, who then tipped Hardin. As alleged in the complaint, Hardin then traded in the securities of 3Com on behalf of a Lanexa Management hedge fund.

To settle the SEC’s charges, Hardin consented to the entry of a judgment that: (i) permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $19,310 plus $2,426 in prejudgment interest. The judgment further provides that upon motion by the SEC, the Court later will determine issues relating to a civil penalty. In a related SEC administrative proceeding, Hardin consented to the entry of an SEC order barring him from association with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent. Hardin previously pled guilty to charges of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Thomas Hardin, 10-CR-399 (S.D.N.Y.), and is awaiting sentencing.

The SEC also announced today the entry of a judgment against Hardin in a separate case alleging insider trading in other securities. See SEC v. Thomas C. Hardin, No. 10-CIV-8600 (S.D.N.Y.) (JSR).

For further information, see Litigation Release Nos. 21741 and 21740 (Nov. 15, 2010).

 

http://www.sec.gov/litigation/litreleases/2011/lr21999.htm


Modified: 06/14/2011