SEC v. Cristian De Colli
Case No. 08-cv-04520-PAC (S.D.N.Y.)
On May 15, 2008, the Commission filed a complaint against Cristian De Colli ("Defendant"). The complaint alleged that, from April 10, 2008 through May 7, 2008, the Defendant violated federal securities laws by engaging in insider trading. With knowledge of non-public information of advanced merger negotiations between DRS Technologies, Inc. ("DRS") and Finmeccanica S.p.A, the Defendant used non-public information to purchase shares and call options of DRS common stock. The complaint further alleged that after public disclosure of the merger talks, the Defendant liquidated all of his call options and made his ill-gotten profit of more than $2.1 million on his initial investment of approximately $422,000. See Complaint.
The Defendant was ordered to pay a total of $4,343,498.56 in disgorgement, prejudgment interest and penalties. The Clerk was ordered to hold the funds in an interest bearing account with the Court Registry Investment System (collectively, the "Fund"), pending further order of the Court. See Defendant's Final Judgment.
The Defendant has paid a total of $2,615,585.30 of the amount ordered into the Fund for the distribution to harmed investors.
On February 13, 2009, the Court appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Fund.
On September 17, 2013, the Commission filed a motion to establish a Fair Fund, approve the distribution plan, and establish notice procedures, together with a memorandum of law in support of its motion with the distribution plan ("Distribution Plan") attached thereto. See Motion to Establish Fair Fund, Approve Distribution Plan, and Establish Notice Procedures and Memorandum in Support with the Distribution Plan.
On September 18, 2013, the Court granted the Commission's motion and entered an order that established a Fair Fund for the funds paid by the Defendants and approved the Distribution Plan. See Order Establishing Fund, Approving Distribution Plan, and Establishing Notice Procedures.
The Distribution Plan calls for the Fair Fund to be distributed among those persons or entities who sold DRS call options positions to Defendant between April 15, 2008 through May 7, 2008 and who suffered a loss as a result.
On August 15, 2014, the Commission filed a motion to set aside the $19,861.72 in prejudgment interest in the Fair Fund to avoid investors being taxed, distribute $68,236.00 to the 5 eligible investors, and set aside the remaining amount in a non-interest bearing account to help expedited the process of terminating the Fair Fund. See Motion to Disburse.
On August 28, 2014, the Court granted the Commission's motion and entered an order to disburse $68,236.00 from the Fair Fund for distribution to eligible investors, set aside the prejudgment interest, and transfer the remaining funds to a non-interest bearing account. See Order to Disburse.
For more information, please contact the Commission:
Office of Distributions