UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16325 / October 1, 1999
SECURITIES AND EXCHANGE COMMISSION v. GLEN RICHARD LEBLANC, ET AL.
On September 30, 1999, the Commission filed a civil insider trading case in the Northern District of Texas [Dallas Division] against Glen Richard LeBlanc, William Scot Reinke and Timothy Alan Wilson. Simultaneously with the filing of the Complaint, all defendants consented to the entry of a Final Judgment on a neither admit nor deny basis, which imposes an injunction against future violations of the antifraud provisions of the federal securities laws and requires LeBlanc, Reinke and Wilson to disgorge $5,625, $9,062.50 and $13,750, respectively, plus prejudgment interest thereon, representing the profits they made by trading in Fay's Inc. common stock while in possession of material non-public information. The agreed Final Judgment also orders LeBlanc, Reinke and Wilson to pay civil penalties of $28,437.50, $9,062.50, and 13,750 respectively.
According to the Complaint, LeBlanc misappropriated material, non-public information concerning J.C. Penney Company, Inc.'s negotiations with and planned acquisition of Fay's, Inc., a small Northeast regional drugstore chain, in June 1996. The Complaint alleges that on or about June 10, 1996, LeBlanc, while in possession of this information, purchased Fay's common stock and tipped this information to Reinke and Wilson. The Complaint alleges that Reinke and Wilson also purchased Fay's Inc. common stock between June 11 and July 9, 1996, based upon the information received from LeBlanc.
On July 10, 1996, Fay's Inc. announced publicly that it was in merger negotiations with Penney's and its subsidiary, Thrift Drugs, Inc. Following this announcement, Fay's common stock priced increase 20 percent from $8.625 on July 9, 1996, to $10.375 for the two trading days following the announcement. As a result of their trading prior to the July 10, 1996 announcement, the Commission's Complaint alleges that LeBlanc, Reinke and Wilson profited in the amounts of $5,625, $9,062.50 and $13,750, respectively, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.http://www.sec.gov/litigation/litreleases/lr16325.htm