U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19939 / December 08, 2006
Securities and Exchange Commission v. Alfred S. Teo, Sr., et al., Civil Action No. CV 04-1815-SDW-MCA (D. N.J.)
Richard A. Herron Enjoined from Engaging in Insider Trading
The Securities and Exchange Commission announced that on December 6, 2006, Judge Susan D. Wigenton entered a final judgment against defendant Richard A. Herron ("Herron"), enjoining him from further violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The judgment also ordered Herron to disgorge $71,031 plus $28,995 in prejudgment interest for a total of $100,026, and to pay a $71,031 civil penalty. Herron consented to the entry of the judgment without admitting or denying the allegations in the Commission's complaint.
The complaint, filed on April 22, 2004, charged Herron with engaging in insider trading in the securities of Musicland Stores Corporation ("Musicland") before Musicland's December 7, 2000 announcement that it would be acquired by another company by tender offer. The Commission's complaint alleges that Alfred S. Teo, Sr. ("Teo"), a major Musicland shareholder, learned about the proposed tender offer for Musicland, and then tipped Herron and others with this information. According to the Commission's complaint, on November 14, 2000, after Teo tipped Herron, Herron purchased 15,000 shares of Musicland stock, which he sold on December 7, 2000, and received $71,031 in illicit profits.
The Commission action against the remaining defendants continues.
See also: L.R. 18673 (April 22, 2004)