UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 42305 / January 3, 2000
File No. 3-10128
In the Matter of :
: ORDER INSTITUTING PROCEEDING
Kevin J. Kirkbride, : PURSUANT TO SECTION 15(b)(6) OF THE
: SECURITIES EXCHANGE ACT OF 1934,
Respondent. : MAKING FINDINGS, AND IMPOSING
The Securities and Exchange Commission (the "Commission") deems it appropriate and in the public interest that a proceeding pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 (the "Exchange Act") be instituted against Kevin J. Kirkbride.
In anticipation of the institution of this proceeding, Kirkbride has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purposes of this proceeding and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except as to the entry of the injunction set forth in Section II.B. below and as to the jurisdiction of the Commission over him and the subject matter of the proceeding, which are admitted, Kirkbride consents to the issuance of this Order, the entry of the findings contained herein, and the imposition of the sanction set forth below.
Accordingly, IT IS ORDERED that a proceeding pursuant to Section 15(b)(6) of the Exchange Act be, and hereby is, instituted.
The Commission makes the following findings:
A. Beginning in March 1997, Kirkbride was associated with Smith Barney Inc., a broker-dealer registered with the Commission pursuant to Section 15 of the Exchange Act. Following the November 1997 merger between Smith Barney, Inc. and Salomon Brothers, Inc., through March 1999, Kirkbride was associated with the merged entity, Salomon Smith Barney, Inc., a broker-dealer registered with the Commission pursuant to Section 15 of the Exchange Act.
B. On December 28, 1999, a Final Judgment as to Kirkbride was entered by the United States District Court for the Southern District of New York in the action styled Securities and Exchange Commission v. Richard H. Ference and Kevin J. Kirkbride, 99 Civ. 4028 (LMM) (S.D.N.Y.), which permanently enjoins Kirkbride from violating the antifraud provisions of the Exchange Act, Sections 10(b) and 14(e) and Rules 10b-5 and 14e-3 thereunder. Kirkbride also was ordered to pay disgorgement in the amount of $194,557.77 representing his gains from the conduct alleged in the Complaint, and a civil penalty of $50,000.
C. On June 30, 1999, Kirkbride pleaded guilty to fraud in connection with the purchase and sale of securities, and conspiracy to commit fraud in connection with the purchase and sale of securities and fraud in connection with a tender offer in United States v. Kirkbride, 99 Cr. 576 (SWK) (S.D.N.Y.).
D. The Commission's Complaint in Securities and Exchange Commission v. Richard H. Ference and Kevin J. Kirkbride alleges that over the course of two years, Kirkbride engaged in an insider trading scheme with information Kirkbride misappropriated from his employer, an investment banking firm. According to the Complaint, Kirkbride, while an employee in the Investment Banking Division of Smith Barney, Inc. and later Salomon Smith Barney, Inc. (hereinafter these two entities are referred to interchangeably as "Salomon"), misappropriated nonpublic information concerning merger and acquisition transactions and other material events contemplated by clients of Salomon. Kirkbride then tipped Richard Ference ("Ference"), a friend and former supervisor, who purchased securities of companies involved in transactions contemplated by Salomon clients. The Complaint further alleges that Ference agreed to pay one-third of the profits to Kirkbride. Kirkbride also personally purchased securities based on misappropriated inside information. According to the Complaint, Kirkbride and Ference collectively realized unlawful profits of more than $430,000 on transactions that have been publicly announced, plus additional profits involving transactions that have not been announced.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the following sanction specified in Kirkbride's Offer.
Accordingly, IT IS ORDERED that Kirkbride be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz