Terese Dearmin and Richard Harris

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20155 / June 18, 2007

SEC v. Terese Dearmin and Richard Harris, (United States District Court for the District of Columbia, C.A. No. 1:07-CV-01089 (JDB ))

SEC Files Settled Insider Trading Charges against Terese Dearmin and Richard Harris

The Securities and Exchange Commission today filed a settled civil injunctive action in the United States District Court for the District of Columbia against Terese Dearmin (Dearmin) and her father Richard Harris (Harris), alleging violations of federal securities laws in separate instances of insider trading in the securities of U.S. Home & Garden, Inc. (USHG) ahead of the public announcement of its merger with Ionatron, Inc. (Ionatron). Without admitting or denying the allegations in the complaint, Dearmin and Harris have consented to the entry of a final judgment which imposes a permanent injunction, disgorgement, with prejudgment interest, and civil penalties against each defendant.

The complaint alleges that Dearmin and Harris engaged in insider trading in USHG securities. On February 25, 2004, prior to the opening of the market, USHG publicly announced it had agreed to merge with privately-held Ionatron, Inc. Approximately one month before the merger announcement, Dearmin learned of the pending merger from her husband, the former CEO of Ionatron. Dearmin then tipped Harris, her mother, and her business partner, all of whom purchased USHG stock on the basis of that information in advance of the merger announcement.

The complaint further alleges that: (i) Dearmin knew the non-public information regarding the pending merger she misappropriated from her husband was confidential; (ii) Dearmin knew, or should have known, that she violated a duty of trust and confidence owed to her husband by misappropriating from him the pending merger information, and communicating that information to Harris, her mother, and her business partner; and (iii) Harris knew, or should have known, that the pending merger information he received from his daughter had been obtained in breach of a duty of trust and confidence.

Dearmin has consented to the entry of a final judgment that permanently enjoins her from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, requires her to disgorge $13,178 in illicit gains and $2,390 in prejudgment interest, and orders her to pay a civil penalty of $22,501 civil penalty. Harris has consented to the entry of a final judgment that permanently enjoins him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, requires him to disgorge $9,323 in illicit gains and $1,714 in prejudgment interest, and orders him to pay a civil penalty of $9,323.

The Commission acknowledges the assistance of the National Association of Securities Dealers in this matter.