SECURITIES AND EXCHANGE COMMISSION Washington, D.C. LITIGATION RELEASE NO. 16001 / December 15, 1998 Securities and Exchange Commission v. Rex G. Ahlstrom, U.S. District Court for the Eastern District of Virginia, Civil Action No. 98-1775-A The Securities and Exchange Commission today announced the filing of a settled complaint for insider trading in the securities of BDM International, Inc. against Rex G. Ahlstrom of Reston, Virginia. BDM was a defense and information technology company, headquartered in McLean, Virginia. The complaint, filed with the U.S. District Court for the Eastern District of Virginia, alleges that Ahlstrom purchased BDM stock after learning indirectly of confidential information relating to a tender offer for BDM from his neighbor, a senior executive at BDM. Ahlstrom's trading resulted in illicit profits of $16,315 and violated Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder. According to the complaint, in November 1997, the wife of the senior BDM executive telephoned Ahlstrom's wife and requested child care assistance because she was ill. In this conversation, the senior BDM executive's wife disclosed to Ahlstrom's wife that the senior BDM executive could not assist with child care because BDM was being sold. Ahlstrom's wife relayed this information to Ahlstrom and, after confirming on the Internet that the information was not yet public, Ahlstrom purchased 2,000 shares of BDM stock. At that time, Ahlstrom knew that his neighbor was responsible for merger and acquisition activity at BDM. After the November 21, 1997, announcement by BDM that it had agreed to be acquired in a tender offer by TRW, Inc., Ahlstrom sold his BDM shares for a profit of $16,315. Prior to the filing of the action, Ahlstrom consented, without admitting or denying the allegations of the complaint, to entry of a final judgment permanently enjoining him from violations of Section 14(e) of the Exchange Act and Rule 14e-3 thereunder, and ordering Ahlstrom to pay disgorgement of $16,315, prejudgment interest of $1,171, and a penalty of $16,315 under the Insider Trading and Securities Fraud Enforcement Act, for a total payment of $33,801. The Commission wishes to acknowledge the cooperation of NASD Regulation, Inc. in this matter. The Commission's investigation into trading of BDM securities is continuing.