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U.S. Securities and Exchange Commission

Securities and Exchange Commission
Washington, D.C.

Litigation Release No. 17467 /April 11, 2002

Securities and Exchange Commission v. Geoffrey Etherington II, Marie A. Etherington, Harold W. Etherington, Nora H. Etherington, A&D Components Inc., Charles E. Etherington, Christopher D. Anderson, Alison J. Anderson, and Nellie M. Cardi; No. 1:02CV00691 (PLF)(D.D.C.)(April 11, 2002)

SEC Charges Former Aquarion Company Director and Relatives with Insider Trading
Defendants Agree to Pay $880,000 to Settle Case

The Commission today filed a civil action charging nine defendants, including a former director of Aquarion Company—a water utility based in Bridgeport, Connecticut—with insider trading in Aquarion stock. To settle the case, the nine defendants have consented to be permanently enjoined from violating the antifraud provisions of the Securities Exchange Act of 1934 (Exchange Act) and to pay a total of more than $880,000 in disgorgement, prejudgment interest, and civil money penalties.

The Commission's complaint alleges the following: before the June 1, 1999 public announcement that Aquarion would be acquired by Yorkshire Water, plc, Geoffrey Etherington II—then a director of Aquarion—tipped his sons Charles E. Etherington and Harold W. Etherington, Harold's wife Nora H. Etherington, and a company owned by Harold and Nora Etherington, about the impending sale. These four tippees bought a total of 15,847 Aquarion shares. Geoffrey Etherington also tipped his wife, Marie A. Etherington, and she passed on the tip to her mother Nellie M. Cardi, her son from a previous marriage Christopher D. Anderson, and Christopher's wife Alison J. Anderson. These three tippees bought a total of 17,994 Aquarion shares. When the announcement of the sale drove up the stock price, the defendants made illegal profits of $233,400.

Without admitting or denying the Commission's allegations, the defendants consented to the entry of final judgments enjoining them from violating Exchange Act Section 10(b) and Exchange Act Rule 10b-5, and ordering:

  • Geoffrey Etherington II to pay a $233,400 civil penalty and, jointly and severally, disgorgement and interest totaling $287,335;
     
  • Marie A. Etherington to pay a $127,067 civil penalty and, jointly and severally, disgorgement and interest totaling $156,430;
     
  • Charles E. Etherington to pay a $21,152 civil penalty and, jointly and severally, disgorgement and interest totaling $26,039;
     
  • Harold W. Etherington to pay a $18,043 civil penalty and, jointly and severally, $104,864 disgorgement and interest totaling $104,864;
     
  • Nora H. Etherington to pay, jointly and severally, disgorgement and interest totaling $104,864;
     
  • A&D Components Inc., Harold and Nora Etherington's company, to pay a $67,137 civil penalty and, jointly and severally, disgorgement and interest totaling $82,651;
     
  • Christopher Anderson to pay a $67,461 civil penalty and, jointly and severally, disgorgement and interest totaling $83,050;
     
  • Alison J. Anderson to pay, jointly and severally, disgorgement and interest totaling $83,050; and
     
  • Nellie M. Cardi to pay a $59,606 civil penalty and, jointly and severally, disgorgement and interest totaling $73,380.

The Commission thanks the New York Stock Exchange for its cooperation in this matter.

 

http://www.sec.gov/litigation/litreleases/complr17467.htm


Modified: 04/11/2002