U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22387/ June 1, 2012
Securities and Exchange Commission v. Charles E. Mazur, Jr. et al., Civil Action No. 12-cv-00731-NBF (W.D.Pa.)
SEC CHARGES THREE FORMER CONSOL ENERGY, INC. EMPLOYEES WITH ILLEGAL TRADING IN ADVANCE OF AN ACQUISITION ANNOUNCEMENT
The Securities and Exchange Commission announced today that on June 1, 2012, it filed a civil action against three former employees of CONSOL Energy, Inc. (“CONSOL”) for illegal insider trading in CONSOL securities in advance of the company’s public announcement, on March 15, 2010, that it entered into an agreement to acquire the Appalachian Exploration and Production business of Dominion Resources, Inc. (“Dominion”). The Commission alleges that on March 9, 2010, both Charles E. Mazur Jr., CONSOL’s former Director of Corporate Strategy, and Joseph A. Cerenzia, CONSOL’s former Director of Public Relations, received a confidential email stating that the acquisition of Dominion was going to be announced prior to the opening of the market on March 15, 2010. Both individuals traded CONSOL securities after learning of the pending acquisition announcement. James S. Poland, CONSOL’s former General Manager of Engineering, conducted an environmental survey in connection with the of the Dominion acquisition. Poland also traded CONSOL stock after receiving nonpublic information about the acquisition and when it would be announced.
The Commission’s complaint alleges that Mazur violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5(a) and (c) thereunder, and alleges that Poland and Cerenzia violated of Sections 17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder, and seeks permanent injunctions, disgorgement, prejudgment interest and civil penalties.
The defendants agreed to settle the Commission’s charges, without admitting or denying the allegations in the Commission’s complaint. Under the settlements, the defendants consented to Final Judgments that will permanently enjoin Mazur from violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and permanently enjoin Poland and Cerenzia from violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Mazur agreed to pay approximately $97,171 in disgorgement, prejudgment interest, and civil penalties. Poland agreed to pay approximately $19,600 in disgorgement, prejudgment interest, and civil penalties. Cerenzia agreed to pay approximately $15,453 in disgorgement, prejudgment interest, and civil penalties. The settlements are subject to court approval.
The Commission acknowledges and appreciates the assistance of the Options Regulatory Surveillance Authority (ORSA).