U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19364 / September 7, 2005
SECURITIES AND EXCHANGE COMMISSION v. JAMESON L. THOTTAM, Civil Action No. CV 05-6584 R (RCx) (C.D. Cal.)
SEC FILES SETTLED INSIDER TRADING ACTION AGAINST FORMER VICE PRESIDENT OF INDYMAC BANCORP, INC.
The Securities and Exchange Commission filed a settled enforcement action today in federal district court in Los Angeles, California, charging Jameson L. Thottam of Houston, Texas with insider trading in the stock of IndyMac Bancorp, Inc. IndyMac's primary operating subsidiary, IndyMac Bank, F.S.B., is the largest savings and loan in Los Angeles County and the tenth largest nationwide. Thottam, age 33, was a vice president in IndyMac's corporate strategic planning department until September 2004.
The Commission's complaint alleges that by mid-July 2004, Thottam became aware that the company's pro forma earnings for the second quarter of 2004 were significantly above IndyMac's projections. The complaint also alleges that on July 23, 2004, Thottam purchased 200 call options on IndyMac common stock while aware of IndyMac's nonpublic earnings information. The call options were a bet that the price of IndyMac stock would rise in that the options gave Thottam the right to purchase 20,000 IndyMac common shares at $30 per share by a specific date in August 2004.
After IndyMac publicly announced record pro forma earnings for the second quarter of 2004 on July 30, the price of IndyMac common stock closed at $33.22 per share. On August 2, 2004, Thottam realized an illegal profit of $40,258 by liquidating his call options. By engaging in such trading, Thottam breached his duty to IndyMac not to trade on the basis of confidential corporate information.
To settle the Commission's charges, Thottam consented, without admitting or denying the allegations in the Commission's complaint, to the entry of a final judgment permanently enjoining him from future violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Thottam also agreed to pay $40,258 in disgorgement of his illegal trading profits, plus prejudgment interest of $940, and a civil penalty equal to his trading profits of $40,258.
The Commission acknowledges the assistance of the National Association of Securities Dealers in the investigation of this matter.