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U.S. Securities and Exchange Commission

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 17259 / December 5, 2001

SECURITIES AND EXCHANGE COMMISSION V. GEORGE P. MATUS AND PETER T. MATUS, CIVIL ACTION NO. 4:01CV359-PB, (USDC/Eastern District of Texas)

On December 4, 2001, the Commission filed an insider trading case against a senior officer of Carreker Corporation and his brother. Named as defendants were George P. Matus, a senior vice president of Carreker and his brother, Peter T. Matus, a licensed stockbroker. According to the Commission's Complaint, the Matus brothers obtained $209,940 in illegal trading profits by trading on inside information concerning Carreker's May 22, 2001, announcement that the company would miss its first-quarter earnings estimate.

The defendants are:

  • George P Matus, age 33, a resident of Allen, Texas, and Senior Vice President of Investor Relations at Carreker, a Dallas, Texas, based company traded on the Nasdaq stock market.

  • Peter T. Matus, age 27, a resident of Holladay, Utah, and brother of George Matus. Peter Matus is a registered representative with a brokerage firm.

The case was filed in the United States District Court for the Eastern District of Texas, Sherman Division, and has been assigned to Judge Paul N. Brown.

Specifically, the SEC alleges that George Matus had advance knowledge of Carreker's negative earnings news and participated in both the drafting of the press release announcing the negative news and the decision as to when to release the news. However, rather than maintain the confidentiality of the news and abstain from trading in Carreker stock, George Matus conveyed the confidential negative information to his brother and transferred $50,000 to him in order to trade in Carreker securities and profit from the non-public information. Pursuant to their plan, Peter Matus then used his brother's funds to purchase 750 Carreker put options, effectively betting that the price of Carreker shares would decline once the negative news was made public. Predictably, upon release of the negative news, the price of Carreker stock declined-- by approximately 28%. When brother Peter sold the options a week later, the price had declined more than 40%, netting the brothers a profit of over $200,000.

In its lawsuit, the SEC is seeking a permanent injunctions, disgorgement of illegal profits and pre-judgment interest, a penalty under the Insider Trading Sanctions Act, against George Matus and Peter Matus for violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in connection with illegal insider trading while in the possession of material, non-public information. The SEC is also seeking an officer-and-director bar against George Matus, to prohibit him in the future from serving as an officer or director of any publicly traded company.


*  SEC Complaint in this matter.


http://www.sec.gov/litigation/litreleases/lr17259.htm

Modified: 12/06/2001