SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17619 / July 17, 2002
SECURITIES AND EXCHANGE COMMISSION v. RONALD K. MAHABIR, et al., Civil Action No. 02CV 1809 (BSJ) (S.D.N.Y.) (filed March 7, 2002)
Former Morgan Stanley Analyst is Barred from the Securities Industry
On June 28, 2002, the U.S. District Court for the Southern District of New York entered a final judgment against Ronald K. Mahabir ("Mahabir"), a former analyst at Morgan Stanley & Company ("Morgan Stanley"), based upon charges of insider trading. In its Complaint filed on March 7, 2002, the Commission alleged that while he was an analyst at Morgan Stanley, Mahabir provided John and James Panagotacos ("the Panagotacoses") material nonpublic information concerning merger transactions involving PerSeptive Biosystems, Inc., Barnett Banks, Inc. and Beacon Properties Corporation, and provided material nonpublic information concerning Barnett Banks to a former Morgan Stanley analyst ("Former Analyst"). The Complaint further alleged that the Former Analyst purchased securities of Barnett, the Panagotacoses purchased securities of Barnett and Beacon, and James Panagotacos also purchased securities of PerSeptive, while each was in possession of material nonpublic information that had been provided to them by Mahabir. Finally, the Complaint alleged Mahabir's tippees made illegal profits of over $175,000 as a result of their insider trading.
Mahabir consented to the entry of the final judgment, which permanently enjoins him from violating the antifraud provisions contained within Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Court also ordered Mahabir to pay a civil penalty of $264,961.50, which represents one and one-half times the profits made by his tippees.
Today, based on the entry of the Court's injunction, the Commission also instituted settled administrative proceedings against Mahabir. Without admitting or denying the Commission's findings, Mahabir consented to the entry of the Commission's Order, which bars him from associating with any broker, dealer or municipal securities dealer. In the Matter of Ronald K. Mahabir, Administrative Proceeding File No. 3-10837; Securities Exchange Act of 1934 Release No. 46217 (July 17, 2002). See also Litigation Release No. 17401 (March 7, 2002).