UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17143 / September 20, 2001
Securities and Exchange Commission v. Dennis Ciccone, Civil Action No. 01-1757 (W.D. Pa.)
SEC CHARGES MANAGING DIRECTOR OF VENTURE CAPITAL FUND WITH INSIDER TRADING
Defendant To Pay $59,000 To Settle Charges
The Securities and Exchange Commission today charged Dennis Ciccone of Sewickley, Pennsylvania, the managing director of a Pittsburgh-based venture capital fund, with insider trading in advance of the public announcement on November 5, 1999, that a group of outside investors had agreed to invest $500 million in Teligent, Inc. Without admitting or denying the allegations in the complaint, defendant Ciccone has agreed to settle the charges by agreeing to the relief sought and paying a total of $59,144.52. The complaint alleges that Ciccone misappropriated confidential information regarding the pending investment from an individual with whom he shared office space, and who, at the time, was a director of Teligent. Ciccone traded in Teligent common stock in advance of the public announcement and generated unlawful profits of $28,487.50.
The complaint alleges that Ciccone shared office space with Donald Jones, a founding member and general partner of the venture capital fund, and a member of Teligent's board of directors. The complaint alleges that on or before November 4, 1999, Jones received certain materials that described a $500 million investment in Teligent by outside investors. The complaint alleges that Ciccone misappropriated information concerning the pending investment from the materials provided to Jones. On November 4, 1999, Ciccone purchased 2,000 shares of Teligent common stock in his personal brokerage account. The following day, before the opening of the market, Teligent publicly announced the $500 million investment. The price of Teligent's common stock opened at $65 1/8, an increase of $17 1/8 (35 percent) from the prior day's closing price. Later that day, Ciccone sold his Teligent position and realized total unlawful profits of $28,487.50.
The Commission alleges that as a result of the conduct described above, Ciccone violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In its action, the Commission is seeking a permanent injunction, disgorgement, prejudgment interest and a monetary penalty. Ciccone has consented to the entry of a final judgment permanently enjoining him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, without admitting or denying the facts alleged in the complaint. The final judgment also orders Ciccone to pay disgorgement of $28,487.50, plus prejudgment interest thereon of $2,169.52, and a civil penalty of $28,487.50, for a total of $59,144.52.
The Commission gratefully acknowledges the assistance provided by the National Association of Securities Dealers-Regulation in the investigation of this matter.