U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19393 / September 26, 2005
Securities and Exhange Commission v. Brian G. Paquette and William G. Lawrence, Civil Action No. 3:05CV412 (W.D.N.C.)
SECURITIES AND EXCHANGE COMMISSION SUES TWO INDIVIDUALS FOR INSIDER TRADING AT LENDINGTREE
U.S. ATTORNEY FOR THE WESTERN DISTRICT OF NORTH CAROLINA CHARGES FORMER LENDINGTREE VICE PRESIDENT WITH OBSTRUCTION OF JUSTICE
Today the Securities and Exchange Commission announced that it filed an insider trading complaint in the United States District Court for the Western District of North Carolina against Brian G. Paquette, the former Vice President of Product Management at LendingTree, Inc., and William G. Lawrence, a LendingTree employee. LendingTree is a financial services company based in Charlotte, North Carolina. The Commission's complaint alleges that, shortly before the May 5, 2003, public announcement that LendingTree was being acquired by USA Interactive at a substantial premium to LendingTree shareholders (the "Announcement"), Paquette improperly provided material nonpublic information concerning the pending acquisition to Lawrence and to a close friend and business associate outside the company. The complaint alleges that both Lawrence and Paquette's second tippee then purchased shares of LendingTree while in possession of this material nonpublic information. The complaint further alleges that after the Announcement, the price of LendingTree stock soared, and Lawrence and the second tippee sold their shares realizing unlawful profits of $2,109 and $12,420, respectively.
Without admitting or denying the allegations in the complaint, Paquette and Lawrence consented to the entry of final judgments against them that permanently enjoin them from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgments also require Paquette to pay a $29,058 civil penalty, which is equal to two times the trading profits of his tippees, and require Lawrence to disgorge his illegal trading profits of $2,109, plus prejudgment interest, and pay a two-time civil penalty of $4,218.
In a related criminal case, the U.S. Attorney's Office for the Western District of North Carolina announced today that Paquette has agreed to plead guilty to a felony obstruction of justice charge, for providing false testimony in the Commission's investigation. The Commission wishes to thank the U.S. Attorney's Office for its assistance in connection with this matter.
The Commission previously has filed other insider trading cases arising from this investigation. See SEC v. Ricks, Woody, and Mead, No. 3:04CV576 (W.D.N.C. Nov. 22, 2004)/Lit. Rel. No. 18983; SEC v. Talbot, No. CV 04-4556 (C.D. Cal. June 24, 2004)/Lit. Rel. No. 18762; and SEC v. Bartlett, No. 3:03CV463 (W.D.N.C. Sept. 24, 2003).
The Commission's investigation continues.