SECURITIES AND EXCHANGE COMMISSION Washington, D.C. Litigation Release No. 16052 / February 3, 1999 Securities and Exchange Commission v. Donna Yun and Jerry Burch, 99 CIV-117-22A (M.D. Fla., February 3, 1999) The Securities and Exchange Commission announced today that it filed an insider trading action against two real estate brokers, Donna Yun, of Longwood, Florida and Jerry Burch, of Heathrow, Florida. The Complaint alleges that on February 18, 1997, Yun learned from her husband, an officer of Scholastic Corporation ("Scholastic"), material non-public information about an unanticipated earnings announcement by Scholastic: that it expected to post a loss of 20-30 cents per share for the quarter ending February 28, 1997. Her husband also told her that he expected the share price of Scholastic common stock, which was trading at approximately $65, to decline to $55 per share as a result of the announcement. Yun’s husband told her this information with the understanding that she would hold it in confidence. The Complaint alleges further that at a cocktail party that evening Yun disclosed to Burch, a co-worker, her husband’s prediction regarding a decline in Scholastic’s stock price and the reasons for that prediction. On February 19 and 20, 1997, Burch purchased 130 Scholastic put option contracts, including 10 February series contracts which expired on February 21, 1997, and 90 put option contracts with a strike price of $60 or below. Scholastic’s announcement concerning its loss for the quarter was released publicly after the close of trading on February 20, 1997. That day, Scholastic common stock closed before the announcement at $61.50 per share. The following day, the price of Scholastic common stock dropped approximately 40 per cent, and closed at $36.75 per share. On February 21, Burch exercised his put options for a net profit of approximately $269,000. The Commission is seeking permanent injunctions against Donna Yun and Jerry Burch from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as disgorgement of Jerry Burch’s illegal profits, prejudgment interest and civil penalties. The Commission acknowledges the assistance of the Chicago Board Options Exchange in investigating this matter.