U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Securities and Exchange Commission

Litigation Release No. 18033 / March 13, 2003

Former Board Chairman of Microtouch Systems, Inc. Charged With Insider Trading by the SEC and Agrees To Pay Over $580,000 in Disgorgement, Interest and Penalties

SEC v. James D. Logan, Civil Action No. 03-10480 NG (D. Mass.)

The Securities and Exchange Commission (the "Commission") announced today that it filed a complaint alleging that James D. Logan, age 49, of Candia, New Hampshire, engaged in illegal insider trading while serving as Chairman of the Board of MicroTouch Systems, Inc., formerly a Methuen, Massachusetts based technology company. According to the complaint, in May, June and September 2000, Logan directed a trust for the benefit of his minor children to acquire MicroTouch stock knowing that MicroTouch was engaged in negotiations with Tyco International Ltd. ("Tyco") and Minnesota Mining and Manufacturing Company ("3M") that could lead to the sale of the company. These negotiations culminated in the acquisition of MicroTouch by 3M in a tender offer transaction in January 2001. Simultaneously with the filing of the Commission's complaint, and without admitting or denying the allegations, Logan consented to a court order enjoining him from future violations of the securities laws and ordering him to disgorge $177,375 in wrongful trading profits and $24,411.27 in interest, to pay a civil penalty of two times the wrongful profits, or $354,750, and to pay an additional $25,000 civil penalty for failing to file SEC Forms 4 with the Commission.

The complaint alleges that from November 1999 through November 2000, MicroTouch was engaged in confidential efforts to sell the company. It further alleges that Logan was informed about those efforts at MicroTouch board of directors meetings and through communicating with MicroTouch's management. In May, June and September 2000, Logan allegedly directed the Logan Children's Trust, a trust for the benefit of Logan's three minor children, to purchase 14,000 shares of MicroTouch stock in ten transactions. Logan also failed to file the required SEC Forms 4 with the Commission that would have disclosed these purchases to the public. On November 13, 2000, MicroTouch announced that it had entered into a definitive agreement pursuant to which 3M would acquire MicroTouch in a tender offer for MicroTouch's outstanding stock at $21.00 per share. The Trust tendered its shares to 3M for a profit of $177,375.

Logan is charged with violating provisions of the federal securities laws prohibiting fraud, insider trading in the context of a tender offer and requiring insiders to report certain securities transactions. In order to settle the charges, Logan agreed to pay a total of $581,536.27 in disgorgement, civil penalties and interest. Logan also agreed to the entry of a permanent injunction prohibiting him from future violations of Sections 10(b), 14(e) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 14e-3 and 16a-3 thereunder.

The Commission staff acknowledges the assistance of the NASD Regulation, Inc. in connection with this investigation.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/lr18033.htm

Modified: 03/14/2003