Litigation Release No. 17022 \ June 1, 2001
SEC v. HENRY T. PIETRASZEK, (U.S.D.C. N.D. Illinois, Civil Action No. 01-C-4047, filed May 31, 2001)
FORMER PRESIDENT AND CEO HENRY T. PIETRASZEK SETTLES INSIDER TRADING CASE
On May 31, 2001, the U.S. Securities and Exchange Commission filed an insider trading action in the United States District Court for the Northern District of Illinois against Henry T. Pietraszek, the former President and CEO of Ventana Medical Systems, Inc, a publicly traded company located in Tucson, Arizona. Simultaneously, Pietraszek consented to the entry of an order enjoining him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering him to disgorge $563,875.20 in trading profits plus $32,586.88 prejudgment interest, and pay a civil penalty of $563,875.20 for a total of $1,160,337.28. Pietraszek consented to the entry of a judgment without admitting or denying the allegations in the Complaint.
This case arises from Pietraszek's unlawful sale of Ventana common stock while he was a member of Ventana's Board of Directors. The Commission's Complaint alleges that, from June 23 through June 28, 2000, Pietraszek sold 61,400 shares of Ventana stock while in possession of material, non-public information regarding Ventana's upcoming public disclosure of lower than expected second quarter 2000 earnings and a write off totaling almost $12 million. Ventana develops, manufactures and markets laboratory instruments. In early June 2000, Ventana management recognized a problem with one of its products. When they determined that the faulty products would negatively impact second quarter earnings and that a significant write off would be required, they scheduled a special board meeting for June 27, 2000 to discuss these matters. On June 23, 2000, Pietraszek was informed about the special board meeting and its subject matter. He also participated in the June 27, 2000 board meeting. On June 29, 2000, Ventana publicly announced its lower than expected second quarter earnings and the write off. By selling before the announcement, Pietraszek avoided $563,875.20 in losses.