SECURITIES AND EXCHANGE COMMISSION
Litigation Release No.17004 / May 16, 2001
SECURITIES AND EXCHANGE COMMISSION v. MICHAEL ANDREW PETRESCU-COMNENE, Civil Action No. 00CIV. 7825 (RMB) (S.D.N.Y.) (filed October 13, 2000)
Former Salomon Smith Barney Investment Banking Analyst Settles Insider Trading Charges
On May 14, 2001, the U.S. District Court for the Southern District of New York entered a final judgment against Michael A. Petrescu-Comnene, a former investment banking analyst at Salomon Smith Barney charged with repeated acts of insider trading over a nine-month period beginning in December 1999. In its complaint filed on October 13, 2000, the Commission alleged that Petrescu-Comnene illegally tipped friends about several potential merger and acquisition transactions that he learned about while working at Salomon. The complaint alleged that Petrescu-Comnene and his friends made their largest profits -- $40,875 -- by purchasing Associates First Capital Corp. ("AFS") call options the day before the September 6, 2000 announcement that Citigroup, Salomon's parent, had agreed to purchase AFS in an all-stock transaction valued at $31.1 billion. Also on October 13, 2000, the U.S. Attorney for the Southern District of New York filed criminal charges against Petrescu-Comnene.
Without admitting or denying the allegations of the Commission's complaint, Petrescu-Comnene consented to the entry of the final judgment which permanently enjoins him from violating the antifraud provisions contained within Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Court also ordered Petrescu-Comnene to pay $65,813.40, representing disgorgement of illegal profits and prejudgment interest. However, payment of all but $18,000 of this total amount was waived and a civil penalty was not assessed against Petrescu-Comnene, based upon his demonstrated inability to pay.
Today, based on the entry of the Court's injunction, the Commission also instituted settled administrative proceedings to permanently bar Petrescu-Comnene from the securities industry. Without admitting or denying the Commission's findings, Petrescu-Comnene consented to the entry of the Commission's Order, which bars him from associating with any broker, dealer, municipal securities dealer, investment adviser or member of a national securities exchange or registered securities association. In the Matter of Michael Andrew Petrescu-Comnene, Administrative Proceeding File No. 3-10484; Securities Exchange Act of 1934 Release No. 44310 (May 16, 2001); Investment Advisers Act of 1940 Release No. 1944 (May 16, 2001). See also Litigation Release No. 16765 (October 13, 2000).
The Commission wishes to thank the U.S. Attorney for the Southern District of New York for its cooperation in this matter.