Securities and Exchange Commission
Litigation Release No. 17903 / December 19, 2002
Mexican Traders in Prodigy Insider Trading Case To Pay
$273,300 in Settlement With SEC
Securities and Exchange Commission v. Alejandro Duclaud Gonzalez de Castilla, et al., 01 Civ. 3999 (RWS) (S.D.N.Y.)
The Securities and Exchange Commission announced today that the U.S. District Court for the Southern District of New York entered final judgments on December 13, 2002, against Alejandro Duclaud González de Castilla and Rodrigo Igartua Baranda, and their respective off-shore trusts, for insider trading in Prodigy Communications Corporation common stock in 1999. The insider trading took place shortly before SBC Communications Inc. announced on November 22, 1999, that it was acquiring a large interest in Prodigy. The defendants consented to the judgments without admitting or denying the allegations. The court permanently enjoined Duclaud and his offshore trust Anushka Trust, and Igartua and his offshore trust Antares Holdings Investment, Ltd., from violating two antifraud provisions of the federal securities laws, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The court also ordered Duclaud to pay $182,895 in disgorgement and prejudgment interest and a $57,105 civil penalty, and Igartua to pay $25,375 in disgorgement and prejudgment interest and a $7,925 civil penalty.
The Commission's amended complaint alleged the following: Duclaud, then a partner in the Mexico City law firm representing Prodigy's owner in the SBC transaction, tipped his best friend, banker Ignacio Guerrero Pesqueira, and his brother-in-law, Rodrigo Igartua Baranda, about the transaction. In the month preceding the November 22, 1999 announcement of the transaction, Guerrero and Igartua Baranda purchased 59,100 Prodigy shares through their offshore trusts. Guerrero sold his Prodigy shares for substantial profits following the announcement of the Prodigy-SBC transaction, and then transferred $148,300 to Duclaud's offshore trust as a kickback.
Guerrero previously paid $1.55 million to settle the Commission charges that he traded illegally in the common stocks of Prodigy and CompUSA, Inc. See Litigation Release No. 16997 (May 11, 2001).
The Commission acknowledges the assistance of the New York Stock Exchange, the Comisión Nacional Bancaria y de Valores (CNBV) in Mexico City, and HM Attorney General of the Bailiwick of Guernsey, Channel Islands.