U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22682 / April 22, 2013
Securities and Exchange Commission v. Mark D. Begelman, Civil Action No. Civil Action No. 9:13-80396-HURLEY/JAMES (S.D. Fla., filed April 22, 2013)
The United States Securities and Exchange Commission ("Commission") filed a civil action in the United States District Court for the Southern District of Florida against Mark D. Begelman, charging him with insider trading for purchasing Bluegreen Corporation stock in advance of BFC Financial Corporation's announcement that it would acquire Bluegreen.
The Commission's complaint alleges that as a member of the World President's Organization ("WPO"), Begelman learned from a fellow WPO member material, non-public information concerning Bluegreen's and BFC's negotiations and plans to enter into a business combination. Begelman's fellow WPO member was a high-ranking executive in both companies. It was the specific written policy of the WPO that matters of a confidential nature were to be kept confidential. The complaint alleges that Begelman placed an order to purchase 25,000 shares of Bluegreen stock on November 3, 2011 in breach of a duty of trust and confidence he owed to the WPO member who was the source of the material, non-public information. On November 14, 2011, BFC announced that the companies had entered into a definitive merger agreement. The day that the acquisition was announced, Bluegreen's share price rose nearly 46%, and Begelman sold all of his Bluegreen shares. Begelman made $14,949.34 in illegal trading profits.
Without admitting or denying the Commission's allegations, Begelman agreed to settle the case against him. The settlement is pending final approval by the court. Specifically, Begelman consented to the entry of a final judgment permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; requiring him to pay disgorgement of $14,949.34, the amount of his ill-gotten gains, plus prejudgment interest of $377.22, and a civil penalty of $14,949.34; and prohibiting him from serving as an officer and director of a public company for a period of five years.
The Commission thanks FINRA's Office of Fraud Detection and Market Intelligence for its assistance in this matter. The Commission's investigation was conducted in the Miami Regional Office by Senior Investigations Counsel Gary M. Miller under the supervision of Assistant Regional Director Elisha L. Frank. Regional Trial Counsel, Robert K. Levenson will lead the Commission's district court action.