U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19157 / March 25, 2005
Securities and Exchange Commission v.Richard A. Svoboda and Michael A. Robles, Civil Action No. 00 Civ. 8557 (MBM) (Southern District of New York) (originally filed on November 7, 2000)
SEC Amends Complaint in Insider Trading Case
On March 22, 2005, the Securities and Exchange Commission (Commission) filed its First Amended Complaint (Amended Complaint) against defendants Richard A Svoboda (Svoboda) and Michael A. Robles (Robles), in the United States District Court for the Southern District of New York. The Amended Complaint in this insider trading case alleges that defendant Svoboda, formerly an employee of NationsBank, N.A. (NationsBank), traded in the securities of nine companies on the basis of material nonpublic information that he stole from NationsBank and its customers. The Amended Complaint also alleges that Svoboda schemed with and tipped his long-time friend, defendant Robles, who traded in the securities of twenty companies on the basis of material nonpublic information stolen from NationsBank and its customers. According to the Amended Complaint, Svoboda's and Robles' combined ill-gotten gains (not including interest) from their illegal insider trading were approximately $1.25 million. The Amended Complaint alleges that the defendants' insider trading violated Section 17(a) of the Securities Act of 1933, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Exchange Act Rules 10b-5 and 14e-3, and seeks injunctive relief, disgorgement, and civil money penalties.
The Commission filed its original complaint on November 7, 2000, the same day Svoboda and Robles were indicted in a related criminal case in the United States District Court for the Southern District of New York.
In the criminal case, Svoboda pleaded guilty to conspiracy, securities fraud, and tender offer fraud, and was sentenced to be incarcerated for 12 months and one day, and to pay a $200,000 fine. After a merits trial, a federal jury convicted Robles of conspiracy, securities fraud, and tender offer fraud. He was sentenced to be incarcerated for 41 months, and to pay a $300,000 fine. The Second Circuit Court of Appeals affirmed Robles' conviction on October 24, 2003. See United States of America v. Richard A. Svoboda and Michael A. Robles, 347 F.3d 471 (2d Cir. 2003). cert. denied, Robles v. United States, 124 S. Ct. 2196 (2004)