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U.S. SECURITIES & EXCHANGE COMMISSION

LITIGATION RELEASE NO. 18321 / September 3, 2003

COMMISSION FILES COMPLAINT AGAINST ROBERT ARNESON AND RIDGEDALE STATE BANK

UNITED STATES SECURITIES AND EXCHANGE COMMISSION v. ROBERT ARNESON AND RIDGEDALE STATE BANK, (U.S. D.C. Minn. 2003) 003-CV-5160.

The U.S. Securities and Exchange Commission announced today that it filed and simultaneously settled an injunctive action in the United States District Court for the District of Minnesota against Robert Arneson ("Arneson") and Ridgedale State Bank ("Ridgedale Bank"). The Commission's complaint alleges Arneson violated Sections 10(b) and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 16a-3 thereunder [15 U.S.C. § 78j(b) and § 78p(a) and 17 C.F.R. §240.10b-5 and §240.16a-3]. The Commission's complaint further alleges that Ridgedale Bank violated Section 16(a) of the Exchange Act and Rule 16a-3 thereunder [15 U.S.C. § 78p(a) and 17 C.F.R. §240.16a-3].

The Commission's complaint alleges that Arneson engaged in insider trading by trading in the securities of Tower Automotive, Inc. and Kinnard Investments, Inc., while in possession of material, nonpublic information provided by George Kline. The complaint alleges that this constituted violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.

The Commission complaint also alleges that both Arneson and Ridgedale Bank aided and abetted George Kline's violations of failing to report stock transactions by a corporate insider by providing loans to a corporation controlled by Kline, which Kline used to purchase stock. This activity constituted violations of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder.

Areneson consented, without admitting or denying the allegations in the complaint, to the entry of an order of permanent injunction enjoining him from violations of Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5 and 16a-3 thereunder. Arneson also consented to pay disgorgement for the insider trading violations in the amount of $15,094, prejudgment interest in the amount of $5,305.21, a civil penalty in the amount of $15,094, and an additional civil penalty in the amount of $25,000 for aiding and abetting George Kline's reporting violations.

Ridgedale Bank consented, without admitting or denying the allegations in the complaint, to the entry of an order of permanent injunction enjoining Ridgedale Bank from violations of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder. Ridgedale Bank also consented to pay disgorgement in the amount of $65,582, prejudgment interest in the amount of $26,604.67, and a civil penalty in the amount of $40,000.

The Commission would like to thank the Board of Governors of the Federal Reserve, the Federal Reserve Bank of Minneapolis and the United States Attorney for the District of Minnesota for its assistance and cooperation in this matter.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/lr18321.htm


Modified: 09/03/2003