UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15666 / March 11, 1998. SECURITIES AND EXCHANGE COMMISSION v. ROGER H. LICHT, STEVEN L. WESTON, ROBERT P. KORDA, WILLIAM J. BARISOFF, LYNN WESTON, SEYMOUR J. MELNIK, ANDREW K. LICHT, D. MARK SANDELSON, and RONALD B. SCHILLING, Civil Action No. 98-1724 KMW (AIJx) The Securities and Exchange Commission ( Commission ) filed a Complaint today in the United States District Court for the Central District of California charging Roger H. Licht ( Licht ), Steven L. Weston ( Weston ), Robert P. Korda ( Korda ), William J. Barisoff ( Barisoff ), Lynn Weston (L. Weston ), Seymour J. Melnik ( Melnik ), Andrew K. Licht ( A. Licht ), D. Mark Sandelson ( Sandelson ) and Ronald B. Schilling ( Schilling ) with a pattern of insider trading in the securities of three public companies: Leisure Concepts, Inc. ( LCI ), Medco Containment Services, Inc. ( Medco ) and Synetic, Inc. ( Synetic ). The Complaint alleges that the group of friends, family members and associates obtained illegal profits totaling more than $200,000 over a fourteen-month period. The Complaint also alleges that certain of the defendants devised a scheme to mislead the Commission and cover up their illegal trading after the Commission s investigation had begun. Licht, age 44, is an attorney, residing in Bel Air, California. He is a director of Synetic and, at all relevant times was also a director of Medco. Weston, age 40, resides in Pacific Palisades, California. He is Licht s friend and brother-in-law. At all relevant times he was the president of LCI. Korda, age 43, resides in Los Angeles, California, and is Licht s friend and former law client. William J. Barisoff, age 54, residing in Long Beach, California, is Licht s friend and former law client. L. Weston, age 44, resides in Pacific Palisades, California. She is Weston s wife, Licht s sister-in-law and Melnik s friend. Melnik, age 58, resides in Whittier, California. He is a physician. He is a friend of L. Weston and of Licht s wife. A. Licht, age 40, residing in Los Angeles, is Licht s brother. Sandelson, age 42, residing in Los Angeles, is Licht s friend and former law client and a friend of A. Licht. Schilling, age 57, residing in Los Altos Hills, California, is Licht s father-in-law. According to the Complaint, on three occasions between March 1993 and May 1994, Licht and Weston exchanged and dispensed tips of material, non- public information relating to the companies for which they worked in breach of their fiduciary duties to those companies and their shareholders. The Complaint alleges that during the period of the offending trades, Licht was a director of Medco and Synetic, and Weston was president of LCI. According to the Complaint, Licht, on one occasion, and various of his co- defendants, on three separate occasions, traded while in possession of material, non-public information. The Complaint further alleges that some ======END OF PAGE 1====== of the defendants, in turn, tipped other defendants in the friends and family circle. Specifically, the Complaint alleges: Licht and Weston engaged in insider trading in March 1993 when Weston tipped Licht concerning LCI s imminent earnings announcement and the upcoming initiation of favorable analyst coverage of LCI. Licht then purchased LCI stock and tipped his friend Korda, who also traded. The illegal profits from this LCI trading totaled $23,431. Licht, Barisoff, Weston, Korda, A. Licht, Sandelson, L. Weston and Melnik engaged in insider trading in July 1993, when Licht, directly and indirectly, tipped this group of friends and family concerning highly confidential merger talks then in progress between Medco and Merck & Co. ( Merck ). The illegal profit derived from the group s Medco stock and options purchases, all of which took place within the four trading days prior to the Medco-Merck merger announcement, totaled $122,623. Licht, Schilling, A. Licht, Weston, Korda, and Sandelson engaged in insider trading in May 1994 in connection with highly confidential discussions between Synetic and Merck leading to a buyback of the Synetic stock held by Merck. Licht directly and indirectly tipped Schilling, Weston and Korda, each of whom bought Synetic stock, and Weston, in turn, directly and indirectly tipped three other persons, who also bought Synetic stock. The total illegal profits derived from the Synetic trading by all the Defendants and Weston s tippees totaled $69,408. Licht, Weston, Korda and Sandelson took part in devising a cover-up scheme featuring the use of a false detective work story to explain the illegal insider trading in Synetic. The Commission seeks permanent injunctions against the Defendants prohibiting further violations of Section 10(b) of the Exchange Act and Rule 10b-5. The Commission also seeks disgorgement of illegal trading profits including prejudgment interest, and civil monetary penalties for the fraudulent conduct under the Insider Trading and Securities Fraud Enforcement Act. The Commission also seeks a Court order permanently barring Defendant Roger Licht from serving as an officer or director of a public company pursuant to Section 21(d)(2) of the Exchange Act. Simultaneously with the filing of the Commission s Complaint, Weston, L. Weston, Melnik and Schilling consented to the entry of final judgments against them without admitting or denying the allegations in the Complaint. Each consented to be enjoined from violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. Additionally, Weston agreed to disgorge all of his own trading profits together with prejudgment interest thereon, for a total of $40,234. Melnik agreed to disgorge his trading profits together with prejudgment interest and civil money penalties for a total of $20,240. Schilling agreed to disgorge his trading profits together with prejudgment interest and civil money penalties for a total of $15,082. With respect to both Westons, disgorgement of their tippees profits was waived and no civil penalty was imposed because of their demonstrated inability to pay based on their sworn representations in their statement of financial condition. ======END OF PAGE 2====== ======END OF PAGE 3======