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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22056 / August 2, 2011

SEC v. Franz Tudor, Civil Action No. 10-CV-8598 (S.D.N.Y.) (RJS)

Former Schottenfeld Proprietary Trader Franz Tudor Settles SEC Insider Trading Charges

The Securities and Exchange Commission announced today that on July 26, 2011, the Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York, entered a final judgment against Franz Tudor in SEC v. Tudor, 10-CV-8598, an insider trading case the SEC filed on November 12, 2010. The SEC charged Tudor, who was a registered representative and a proprietary trader at the broker-dealer Schottenfeld Group, LLC, with using inside information to trade ahead of the November 29, 2009 announced acquisition of Axcan Pharma Inc.

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 Axcan, and tipped the inside information, through another attorney, to Zvi Goffer, a proprietary trader at Schottenfeld, in exchange for kickbacks. The SEC further alleged that Goffer tipped the inside information to Tudor, who traded in the securities of Axcan.

To settle the SEC’s charges, Tudor consented to the entry of a final judgment that: (i) permanently enjoins him from 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 $70,807, plus prejudgment interest of $7,331. No penalty was imposed based on Tudor’s sworn financial statements. In a related SEC administrative proceeding, Tudor consented to the entry of an SEC order barring him from association with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent. Tudor previously pled guilty to charges of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Franz Tudor, 09-CR-1057 (S.D.N.Y.), and is awaiting sentencing.

For further information, see Litigation Release No. 21741 (Nov. 15, 2010).

 

http://www.sec.gov/litigation/litreleases/2011/lr22056.htm


Modified: 08/02/2011