Litigation Release No. 16208 / July 12, 1999
SEC v. ARJUN SEKHRI, AMOLAK SEHGAL, PRATIMA RAJAN, FUAD DOW, GORDON W. COCHRANE, MARTIN L. THIFAULT, ROHINA SHARMA, AND SHARAD KAPOOR, defendants, and MAHENDAR SEKHRI AND SHARDA SEKHRI, relief defendants, Civil Action No. 98 Civ. 2320 (S.D.N.Y.) (RPP)
THIRD DEFENDANT SETTLES SEC'S INSIDER TRADING CHARGES RELATING TO FORMER SALOMON SMITH BARNEY INVESTMENT BANKER BY AGREEING TO PAY ALMOST $800,000 IN DISGORGEMENT AND PENALTIES
The Securities and Exchange Commission announced that on July 7, 1999, Judge Robert P. Patterson of the Southern District of New York signed a final judgment against Martin L. Thifault requiring, among other things, payment of almost $800,000 in settlement of the SEC's illegal insider trading charges against Thifault.
In its amended complaint, filed on May 19, 1998, the SEC alleges that Arjun Sekhri, then an investment banking associate at Salomon Smith Barney Inc. in New York City, tipped Fuad Dow, Sekhri's former college roommate, with information about six major corporate transactions before the transactions were announced to the public. Dow gave the inside information to Thifault, who bought stock or call options on the stock of MCI Communications Corp. and Southern New England Telecommunications Corp. in advance of three announcements involving these companies from October 1997 through January 1998.
Without admitting or denying the SEC's allegations, Thifault settled the SEC's insider trading charges by consenting to the entry of a final judgment, which (1) permanently enjoins Thifault from violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder; and (2) requires Thifault to pay disgorgement of approximately $460,000 in trading profits and prejudgment interest, and approximately $333,000 in civil penalties. The judgment did not impose additional amounts as civil penalties based on Thifault's demonstrated inability to pay.
Dow and Gordon Cochrane, another defendant Dow tipped, previously settled the SEC's insider trading charges by consenting to the entry of final judgments requiring, among other things, payment of over $1.1 million.
Dow, Cochrane, and Thifault previously pled guilty to criminal charges of insider trading. Dow was sentenced to 24 months of incarceration, 2 years of supervised release, and a $200 special assessment. Cochrane and Thifault have not yet been sentenced. Sekhri, a fugitive for more than a year, was arrested on May 30, 1999, by the Australian Federal Police at the Sydney Airport. He is now being held awaiting extradition.
For more information about this case, please see Litigation Release No. 15691 (April 1, 1998); Litigation Release No. 15965 (October 29, 1998); Litigation Release No. 16202 (June 30, 1999).