SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16194 / JUNE 23, 1999
SEC v. John R. Manion, Rocco J. Anselmo, James L. Rammelt, Ivan Kron, Donald S. Italia and William E. Sklar, Action No. CIV 99-1103 PHX (ROS)(D. Ariz.)
The Securities and Exchange Commission (“Commission”) filed a civil action on June 22, 1999, in the United States District Court for the District of Arizona against six defendants for insider trading in the stock of Bio-Dental Technologies Corp. (“Bio-Dental”) prior to the June 3, 1996 announcement that Zila, Inc. (“Zila”) would acquire Bio-Dental. Named as defendants are John R. Manion (“Manion”), Rocco J. Anselmo (“Anselmo”), James L. Rammelt (“Rammelt”), Ivan Kron (“Kron”), Donald S. Italia (“Italia”) and William E. Sklar (“Sklar”). At the same time, the Commission settled its action against five of the six defendants, Anselmo, Rammelt, Kron, Italia and Sklar. As part of the settlement, these parties agreed to pay a total of $250,286 in disgorgement, interest and civil penalties.
The Complaint alleges that Anselmo, a Zila executive who resides in Scottsdale, Arizona, purchased 10,000 Bio-Dental shares, obtaining profits of $23,363, using inside information he had obtained by working on the Bio-Dental acquisition. Anselmo also tipped the news of Zila’s intended acquisition of Bio-Dental to three of his friends: Rammelt, a resident of Racine, Wisconsin; Kron, a resident of Pompano Beach, Florida; and Italia, a resident of San Mateo, California. Anselmo’s tippees purchased a total of 31,200 Bio-Dental shares, obtaining total profits of $67,294.
Sklar, a resident of Tucson, Arizona, provided public relations services to Zila and suggested to Zila that it consider acquiring Bio-Dental. Approximately one month before Zila announced it acquisition of Bio-Dental, Sklar purchased 9,000 Bio-Dental shares, obtaining profits of $20,045.
Manion, the only defendant not settling the Commission’s action, resides in Apopka, Florida. Manion is the owner of Continental Capital & Equity Corp., a financial public relations consulting company. The Complaint alleges that in connection with Manion’s providing a fairness opinion to Zila regarding the acquisition, he obtained the terms of the proposed acquisition and Bio-Dental financial information. Days after providing a favorable opinion to Zila on the Bio-Dental acquisition, Manion purchased 13,000 Bio-Dental shares, obtaining profits of $28,024.
The Complaint alleges that by engaging in insider trading in the securities of Bio-Dental, the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Against each defendant, the Complaint seeks permanent injunctive relief, disgorgement of the defendants’ profits and the imposition of civil penalties.
Simultaneous with the filing of the Complaint, Anselmo, Rammelt, Kron, Italia and Sklar, without admitting or denying the allegations contained in the Complaint, consented to the entry of judgments against them. The judgment permanently enjoins them from future antifraud violations and orders them to disgorge trading profits together with prejudgment interest thereon and pay a civil penalty equal to their profits.
The Commission acknowledges the assistance provided by NASD Regulation, Inc., in connection with this matter.http://www.sec.gov/litigation/litreleases/lr16194.htm