U.S. SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 16278 / September 13, 1999

Securities and Exchange Commission v. Lorraine K. Cassano, Civil Action No. 99-CV-3822 (S.D.N.Y. May 26, 1999)

SIXTH DEFENDANT SETTLES SEC'S LOTUS INSIDER TRADING CHARGES BY AGREEING TO PAY MORE THAN $71,000 IN DISGORGEMENT AND PENALTIES

The Securities and Exchange Commission today announced Joseph Petrosino of Brooklyn, New York, settled the Commission's charges that he engaged in illegal insider trading in advance of IBM's takeover of Lotus Development Corporation. Petrosino has consented to the entry of a final judgment requiring him to pay $29,698 in disgorgement, $11,979 in prejudgment interest and a civil penalty of $29,698. The judgment also permanently enjoins him from future violations of the anti-fraud provisions of the federal securities laws. The Commission filed this matter on May 26, 1999, charging a total of twenty-five individuals with insider trading. Petrosino is the sixth defendant to settle. The Commission is continuing to litigate against the remaining defendants.

The Commission alleged in its Complaint that Petrosino purchased Lotus call options on June 2,1995, after being tipped by a friend, Gerard P. Mazzone. The Complaint alleges that on June 1, 1995, Mazzone called Petrosino, and told him that he learned of IBM's plan to take over Lotus from a mutual friend, Robert Cassano, whose wife worked as a secretary at IBM. According to the Complaint, Cassano had earlier tipped Mazzone. The Complaint further alleged that Cassano's wife, an IBM secretary, had misappropriated the information about IBM's plan to take over Lotus from IBM. Mazzone, Cassano and Cassano's wife were also charged in the case and they have already settled the Commission's charges.

Petrosino was enjoined from further violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. In consenting to the entry of the final judgment, Petrosino neither admitted nor denied the allegations in the Commission's complaint.

For further information, please see Litigation Release Nos. 16185 (June 10, 1999) and 16161 (May 26, 1999) or contact Grant David Ward (617) 424-5936.