U.S. Securities and Exchange Commission
LITIGATION RELEASE NO. 18796 / July 27, 2004
Securities and Exchange Commission v. Peter O. Marion, No. 04 CV 5825 (FOX) (S.D.N.Y. filed July 28, 2004).
SEC CHARGES RHODE ISLAND BUSINESSMAN PETER O. MARION WITH INSIDER TRADING
The Securities and Exchange Commission ("Commission") today filed a complaint in the United States District Court for the Southern District of New York alleging that Peter O. Marion engaged in insider trading in the securities of U.S. Foodservice, Inc. ("USF") in February and March of 2000 after a USF executive, Timothy J. Lee, gave him material, nonpublic information concerning a proposed tender offer for USF by Royal Ahold (Koninklijke Ahold, N.V.) ("Ahold"). The Commission alleges that Marion, through his insider trading, violated the antifraud provisions of the Securities Exchange Act of 1934 ("Exchange Act"). The Commission seeks a final judgment ordering Marion to disgorge all illegal profits, with prejudgment interest thereon; imposing civil money penalties; and enjoining him from future violations of Sections 10(b) and 14(e) of the Exchange Act and Exchange Act Rules 10b 5 and 14e 3.
The Commission's complaint alleges that during the period February 15, 2000 through March 1, 2000, after learning of Ahold's intention to acquire USF at a price of $24 to $26 per share, Marion purchased 36,000 shares of USF common stock at an average price of $14.92 per share. On March 7, 2000, Ahold and USF publicly announced Ahold's tender offer for USF at $26 per share. Marion sold his shares at an average price of $25.02 shortly after the tender offer was announced. As a result of his trading, Marion made illegal profits of approximately $363,894. The complaint further alleges that Marion knew, or was reckless in not knowing, that the information he possessed concerning the proposed acquisition of USF was material and nonpublic and that it had been communicated to him directly or indirectly in breach of a duty of trust and confidence.
The Commission's investigation is continuing. The Commission acknowledges the assistance and cooperation of the Office of the United States Attorney for the Southern District of New York, the New York Office of the Federal Bureau of Investigation, and the U.S. Department of Labor, Employee Benefits Security Administration.
See related Litigation Release No. 18797 / July 27, 2004