U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22000 / June 14, 2011
SEC v. Thomas C. Hardin, Civil Action No. 10-CV-8600 (S.D.N.Y.) (JSR)
Former Lanexa Management Managing Director Thomas C. Hardin Settles SEC Insider Trading Charges
The Securities and Exchange Commission announced today that, on June 6, 2011, The Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York entered a judgment against Thomas C. Hardin in SEC v. Thomas C. Hardin, 10-CV-8600, 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 insider trading in the securities of Hilton Hotels Corp., Google, Inc., and Kronos Inc. Hardin traded based on material nonpublic information concerning takeovers of Hilton and Kronos and a Google quarterly earnings announcement that Hardin received from Roomy Khan, an individual investor who had, herself, received such information from various inside sources.
The Complaint alleged that Khan tipped Hardin to material nonpublic information she received from Deep Shah, a Moody’s rating agency analyst, about an impending takeover of Hilton by The Blackstone Group. Hardin traded on the information on behalf of Lanexa and also passed the information to others. In addition, Khan tipped Hardin to material nonpublic information about Google’s Q2 2007 earnings that she received from Shammara Hussain, an employee at Market Street Partners, an investor relations consulting firm that did work for Google. Hardin traded on the information on behalf of Lanexa and also tipped others. Further, Khan also tipped Hardin to material nonpublic information about the impending acquisition of Kronos Inc. by Hellman & Friedman that she received from Shah, who had first received the information from Shah’s friend. Hardin traded on the information on behalf of Lanexa and also tipped others.
To settle the SEC’s charges, Hardin consented to the entry of a judgment that: (i) permanently enjoins him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $33,321.95 plus $6,749.09 in prejudgment interest. The judgment further provides that 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. Lanexa Management LLC and Thomas C. Hardin, Civil Action No. 10-CV-8599 (S.D.N.Y.) (RJS).