U.S. Securities and Exchange Commission
Litigation Release No. 18379 / September 30, 2003
Securities and Exchange Commission v. DeWalt J. Willard, Jr., et al. (United States District Court, D. Md., Civil Action No. MJG 03-CV-2769)
Former Ag-Chem Equipment Company Director, Two Others, Charged With Insider Trading
The Securities and Exchange Commission announced that on September 30, 2003, it filed a civil injunctive action in the United States District Court for the District of Maryland against DeWalt J. Willard, Jr., William F. Willard, Sr. and Larry L. Martin, for insider trading. The complaint alleges that the three defendants traded while in possession of material non-public information in advance of a November 20, 2000 announcement that Ag-Chem Equipment Company, Inc. ("Ag-Chem") had been acquired by AGCO Corporation. As described below, the defendants have agreed to settle this matter.
The complaint alleges that DeWalt Willard, a member of Ag-Chem's board of directors, after learning of Ag-Chem's merger negotiations, purchased Ag-Chem stock in his own account and through the securities account of a friend, thereby earning illegal profits of $73,287. The complaint alleges that DeWalt Willard also failed to file the required Form 4 with the Commission disclosing any of the purchases made through his friend's account.
The complaint alleges that DeWalt Willard also tipped his son, William Willard, about the merger negotiations. William Willard then tipped Martin, his friend and business associate, and asked Martin to purchase Ag-Chem stock on his behalf. The complaint alleges that Martin purchased Ag-Chem stock for William Willard's benefit, resulting in illegal profits of $33,462 for William Willard. Finally, the complaint alleges that, following receipt of the tip, Martin purchased Ag-Chem stock in his personal brokerage account and for his two sons, earning illegal profits of $109,387.
Without admitting or denying the allegations in the Commission's complaint, all three defendants have consented to permanent injunctions from violations of Section 10(b) of the Securities Exchange Act of 1940 ("Exchange Act") and Rule 10b-5 thereunder. In addition, DeWalt Willard has consented to the entry of a permanent injunction from violations of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder, and to the entry of an order barring him from serving as an officer or director of a public company. DeWalt Willard has also agreed to pay disgorgement of $73,287, together with prejudgment interest of $12,037, and to pay a civil penalty of $107,478. William Willard and Larry Martin have consented to pay disgorgement, jointly and severally, of $142,849, together with prejudgment interest of $23,463. William Willard has also agreed to pay a civil penalty of $33,462, and Larry Martin has agreed to pay a civil penalty of $109,387.
The Commission acknowledges the assistance of NASD Regulation, Inc. in this matter.