SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 18008 / February 28, 2003
SECURITIES AND EXCHANGE COMMISSION V. SUTTON, et. al.
99 Civ. 3889 (RCC) (S.D.N.Y.)
FINAL JUDGMENT ENTERED AGAINST STEPHEN WEISSMAN FOR INSIDER TRADING
The Securities and Exchange Commission ("Commission") announced that on February 14, 2003, the Honorable Richard Conway Casey, United States District Judge for the Southern District of New York, entered a Final Judgment of Permanent Injunction and Other Relief ("Final Judgment") against Stephen Weissman in connection with a Complaint the Commission filed against Weissman and others, on May 27, 1999, for insider trading and financial fraud relating to toy manufacturer Happiness Express, Inc. ("Happiness Express"). The Commission's allegations against Weissman concern solely insider trading of Happiness Express stock. Weissman consented, without admitting or denying the allegations of the Commission's Complaint, to the entry of the Final Judgment, which: (1) permanently enjoins Weissman from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder; (2) orders Weissman to disgorge $79,375 in total insider trading profits, and to pay $33,014.20 in prejudgment interest thereon; and (3) imposes a $79,375 civil penalty against Weissman.
The Commission's complaint alleges the following:
- Weissman received material non-public information concerning Happiness Express's poor financial condition from his close friend, and former Happiness Express CFO, defendant Michael Goldberg.
- From August 17 to August 23, 1995, while in possession of that information, Weissman sold short 13,000 shares of Happiness Express stock.
- On September 6, 1995, Happiness Express publicly announced that it would not meet certain of its then-current financial projections. Weissman covered his short sales immediately thereafter, realizing $79,375 in illegal profits, in violation of the antifraud provisions of the Securities Act and the Exchange Act.
See also: L.R. 16164 (May 27, 1999)
Contact Person: Jack Kaufman (646) 428-1777