U.S. Securities & Exchange Commission
Litigation Release No. 16639 / July 31, 2000
Securities and Exchange Commission v. Ramon R. Obod, Civil Action No. 1:99CV01220 (LFO)(D.D.C.)
United States v. Ramon R. Obod, Criminal No. 00-396 (E.D. Pa.)
Ramon R. Obod Pleads Guilty to Making a False Statement in SEC Investigation
The Securities and Exchange Commission ("Commission") announced that on July 27, 2000, Ramon R. Obod pleaded guilty to a one-count criminal information filed by the U.S. Attorney's office for the Eastern District of Pennsylvania alleging that Obod made false statements to federal officials in violation of 18 U.S.C. §1001. The criminal action arose out of statements Obod made to Commission lawyers in 1996 during a telephone interview conducted as part of an investigation of possible insider trading in the securities of Texas insurer Transport Holdings, Inc. ("Transport") before the September, 26, 1996 public announcement that Transport would be acquired by Indiana-based insurer Conseco, Inc. ("Conseco"). Obod was interviewed about his September 23, 1996 purchase of 500 shares of Transport. The criminal information alleged that Obod knowingly and willfully made a false statement when, asked about the reasons for his purchase, he failed to disclose that he had been informed of Conseco's forthcoming acquisition of Transport by a representative of his client, American Travelers.
The Commission previously filed a civil action against Obod. The Complaint alleged that Obod, a partner in a Philadelphia-based law firm, who was at the time the head of his firm's Corporate Department, was outside counsel to and board member of American Travelers Corporation, which had agreed to be acquired by Conseco in August, 1996. The Complaint further alleged that on Saturday, September 21, 1996, Conseco's CEO told American Travelers President in confidence that Conseco was also going to acquire Transport. The Complaint alleged that American Travelers' President immediately told Obod in confidence of his conversation with Conseco's CEO. The following Monday, September 23, 1996, Obod purchased 500 shares of Transport's stock. Obod sold his Transport stock after the public announcement of the acquisition for a profit of approximately $9,499.92. Obod settled the Commission's case without admitting or denying the Commission's allegations by consenting to the entry of an order enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, requiring him to disgorge $11,460.62, representing his trading profits and prejudgment interest, and requiring him to pay $9,449.92 civil penalty. See Lit. Rel. 16156 (May 20, 1999).