U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 17216 / November 1, 2001
United States v. Michael A. Mooney, U.S. District Court for the District of Minnesota, Criminal Action No. 00-CR-365 JMR/ESS (D.Minn. 2000)
U.S. Securities and Exchange Commission v. Michael A. Mooney, U.S. District Court for the District of Minnesota, Civil Action No. 99-CV-1185 JMR/FLN (D.Minn. 1999)
Mooney Criminally Convicted on 17 Counts in connection with Insider Trading
The U.S. Securities and Exchange Commission ("Commission") and the U.S. Attorney's Office for the District of Minnesota announced that on October 30, 2001, Michael Alan Mooney, of Prior Lake, Minnesota and a former vice president at United HealthCare, was found guilty by a federal jury on eight counts of mail fraud, four counts of securities fraud, and five counts of money laundering related to the insider trading of United HealthCare securities. Mooney purchased call options on United HealthCare common stock while in possession of nonpublic information regarding United HealthCare's negotiations to acquire and merge with the MetraHealth companies. Mooney, learned of the acquisition by his participation in the financial analysis of the proposed transaction. Mooney purchased 400 "options" on United HealthCare stock immediately prior to the June 1995 public announcement of the acquisition. Following the first news reports about the proposed acquisition, the price of United HealthCare stock increased 11 percent during the next two days. Mooney eventually sold the securities, realizing a profit of approximately $274,199.89.
Mooney faces a maximum potential penalty of five years in prison and/or a $250,000 fine on each count of mail fraud and up to ten years in prison and/or a $1 million fine on each count of securities fraud and money laundering. The actual sentence will be determined by Chief Judge Rosenbaum based on the federal sentencing guidelines. A sentencing date is expected in eight to ten weeks.
The Commission previously filed a civil injunctive action against Mooney stemming from the same conduct in August 1999 alleging that he violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in connection with these options purchases. The Commission's action was stayed pending the outcome of the criminal matter.