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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16790 / November 6, 2000

Securities and Exchange Commission v. Jerome J. Nell and Jacqueline Nell , U.S. District Court for the Eastern District of Michigan, Civil Action No. 00-C-74850

The Securities and Exchange Commission announced that it filed a complaint in the United States District Court for the Eastern District of Michigan on November 3, 2000 against Jerome Nell ("Nell") and Jacqueline Nell ("J. Nell"), residents of Walled Lake, Michigan. The complaint alleges that Nell and J. Nell violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder in connection with their purchase and/or tipping others to purchase the stock of MCN Energy Group Inc. ("MCN"), while they were in possession of material, non-public information regarding MCN.

In its complaint, the Commission alleges that in October 1999, MCN and DTE Energy Co. ("DTE") were preparing to announce that DTE had agreed to buy MCN. On October 4, J. Nell learned of the merger in the course of her employment and she communicated material, non-public information about the impending merger to Nell. The Commission further alleges that shortly thereafter, Nell purchased MCN stock. On October 5, 1999, MCN publicly announced that it had definitively agreed to sell to DTE, and MCN stock closed at $23.56 per share, an increase of $5.88 from its previous closing price. Nell received approximately $76,500 in realized and unrealized trading profits from his purchase of MCN stock.

Nell and J. Nell have consented, without admitting or denying the allegations in the complaint, to the entry of a Final Judgment and Order of Permanent Injunction, Civil Penalties, and Other Equitable Relief ("Final Judgment"), which will enjoin Nell and J. Nell from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In addition, the Final Judgment will require Nell to pay disgorgement, representing the realized and unrealized profits from his purchase of MCN stock, as well as prejudgment interest thereon, and civil penalties under Section 21A of the Exchange Act. Specifically, the Final Judgment will require that Nell pay disgorgement of $76,500, prejudgment interest thereon of $3,018, and civil penalties of $76,500. This Final Judgment is subject to approval by the Court.

http://www.sec.gov/litigation/litreleases/lr16790.htm


Modified:11/06/2000