U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19105 / February 28, 2005
INSIDER TRADING CHARGES FILED AGAINST ROBERT GOEHRING
Securities and Exchange Commission v. Robert Goehring, Civil Action No. 3:05-CV-350 (AWT ) (D.Conn. filed February 28, 2005)
The Securities and Exchange Commission announced today that it filed a contested insider trading case in the United States District Court for the District of Connecticut against Robert Goehring. In its Complaint, the Commission alleged that Goehring, age 64, was the director of corporate communications of Gerber Scientific, Inc. (“Gerber”). In this position, Goehring reported directly to Gerber's president and chief executive officer. Goehring's duties included helping prepare company press releases – including those announcing earnings and other material corporate developments – and serving as the company's investor relations contact. While serving as director of corporate communications, Goehring regularly obtained material, non-public information about Gerber. Between July 1998 and April 2000, Goehring traded in the Gerber stock nine times on the basis of material, nonpublic information he obtained in the course of his employment as Gerber's director of corporate communications. Goehring enjoyed profits and avoided losses from these illicit trades of $94,016. In addition, Goehring tipped his close friend, Armund Ek, who was not employed at Gerber, with material, non-public information about Gerber on three occasions. Ek bought and sold Gerber stock based on these tips and had profits and avoided losses totaling $11,453 as a result of his trading.
The Complaint alleges that as a member of Gerber's management leadership team, Goehring attended officers' meetings where material, non-public information about Gerber was discussed. At these meetings, Gerber's general counsel frequently stressed that there was not to be any trading of Gerber stock based on inside information, and that members of the leadership management team should consult with him before electing to trade in Gerber stock. In addition, from as early as November 1998, Goehring received confidential monthly letters which Gerber's subsidiaries sent to Gerber's president and CEO. These letters frequently contained earnings, earnings projections, and other material, non-public information about Gerber.
In summary, the Complaint alleges that Goehring bought and sold Gerber stock nine times in advance of company announcements. Specifically, Goehring bought in advance of positive quarterly earnings and other favorable company announcements on four occasions. The complaint alleges that Goehring traded in advance of the August 20, 1998; November 19, 1998; May 27, 1999; February 17, 2000 announcements. Goehring tipped his friend Ek who also traded in advance of the August 20, 1998 earnings announcement. Goehring also purchased Gerber stock on February 23, 2000, March 1, and March 3, 2000 in advance of Gerber’s March 7, 2000 announcement that it planned to form an on-line apparel venture. Goehring also tipped his friend Ek who bought Gerber stock on March 2, 2000. Finally, prior to Gerber’s public announcement on April 26, 2000 that its fourth quarter results would be lower than expected, Goehring liquidated his entire position in Gerber and sold short shares of Gerber stock. Goehring tipped Ek who also liquidated his entire position in Gerber.
The Commission complaint alleges that because of his position with Gerber, Goehring owed a fiduciary duty, or other duty of trust or confidence owed directly, indirectly or derivatively to Gerber and its shareholders. This included a duty to not trade Gerber shares on the basis of material, non-public information and to not communicate such information improperly to others. By engaging in insider trading and by tipping his friend Ek with material non-public information about Gerber, Goehring violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”). The Commission seeks a judgment against Goehring: a) enjoining him from future violations of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5, b) ordering Goehring to disgorge the profits and losses avoided by himself and his tippee as a result of the unlawful trading, c) imposing a monetary penalty, and d) imposing an officer and director bar.
Separately, the Commission announced today that it filed a settled insider trading case in the United States District Court for the Southern District of New York against Armund Ek (No. 05 CV 2425 (SWK)), Lit. Release No. 19104.
Also today, the Office of the United States Attorney for the Southern District of New York announced the unsealing of an indictment against Goehring on related insider trading charges.