SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No. 16840 / December 21, 2000

SECURITIES AND EXCHANGE COMMISSION V. DONNA YUN & JERRY BURCH, Case Number 6:99-cv-117-ORL-22 (United States District Court for the Middle District of Florida, Tampa Division)

SEC OBTAINS JURY VERDICT AGAINST TWO DEFENDANTS
IN SCHOLASTIC INSIDER TRADING CASE

The Securities and Exchange Commission announced today that on December 14, 2000, a federal jury found two Tampa-area real estate agents, Donna Yun of Longwood, Florida, and Jerry Burch of Heathrow, Florida, liable for illegal insider trading in options on the stock of Scholastic Corporation. The jury returned its verdict after an eight-day trial presided over by U.S. District Judge Ann Aldrich.

In its complaint, filed on February 3, 1999, the Commission alleged the following: on or before February 18, 1997, Yun's husband, an officer of Scholastic, told Yun in confidence that Scholastic would announce that it expected a loss for the quarter ending at the end of that month. Yun's husband also told her that he expected Scholastic common stock, then trading at approximately $65 per share, to decline to $55 as a result of the announcement. At a cocktail party that evening Yun disclosed this information to her co-worker Burch. During the following two days Burch purchased 130 Scholastic put option contracts, which would rise in value if Scholastic stock went down. After the close of trading on the second day, Scholastic announced the expected loss. The next day the price of Scholastic common stock dropped approximately 40 percent, and Burch exercised his put options, making a net profit of approximately $269,000.

The Court entered judgment against Yun and Burch on December 19. At a later date the Court will determine the appropriate relief, which may include permanent injunctions, civil penalties, and disgorgement of ill-gotten gains.