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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21246 / October 9, 2009

Securities and Exchange Commission v. Joseph J. Queri, Jr., Gary M. Gosson, et al., Case No. 2:08-cv-01361-AJS (W.D. Penn.)

Securities and Exchange Commission v. Joseph J. Queri, Jr., Joseph J. Queri, Sr., et al., Case No. 2:08-cv-01367-AJS (W.D. Penn.)

SEC Resolves Charges Against Remaining Defendants In Related Insider Trading Cases

The Securities and Exchange Commission today announced that it has obtained final judgments against Gary M. Gosson, Gary L. Camp, Alan J. Johnston, James L. Jerome and Brandt A. England, the remaining defendants in two related district court cases. The Commission originally charged sixteen individuals with insider trading in advance of Dick's Sporting Goods Inc.'s June 21, 2004 announcement that it intended to acquire Galyan's Trading Company, Inc. via a tender offer.

The complaints, which the SEC filed in the Western District of Pennsylvania on September 30, 2008, alleged:

  • Joseph J. Queri, Jr., who was the Senior Vice President of Real Estate for Dick's, tipped his close friend, Gosson, and his father, Joseph Queri, Sr., about the acquisition.

  • Gosson, a resident of Syracuse, New York, tipped nine friends, including Camp and Johnston, who all bought shares of Galyan's stock. Gosson traded through Camp's brokerage account and received trading profits from two other friends, thereby profiting $47,127.00. Camp traded and profited $128,792.00. Johnston traded and profited $26,503.48. He also tipped five family members and friends who bought Galyan's stock and profited a total of $45,741.41.

  • Queri, Sr., a resident of Las Vegas, Nevada, tipped six friends, including Jerome. Jerome traded and profited $46,246.00. He also tipped his friend, England, who bought Galyan's stock and profited $51,158.00.

The day after the public announcement, Galyan's stock closed at $16.68, a 50.3% increase from the previous day's closing price of $11.10. The trading connected to Queri, Jr.'s tips resulted in over $600,000 in illegal trading profits.

On August 10, the Honorable Arthur J. Schwab, U.S. District Court Judge, entered a Final Judgment by Default against Gosson and a Final Judgment against Gary L. Camp, a resident of Manlius, New York. The Final Judgments permanently enjoin Gosson and Camp from future violations of the antifraud provisions of the securities laws, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5 and 14e-3 thereunder. Gosson was also ordered to pay disgorgement of $47,127.00, plus prejudgment interest of $17,174.26, and a civil penalty in the amount of $274,613.00 for trading and tipping nine friends. Camp was ordered to pay disgorgement of $128,792.00, plus prejudgment interest of $46,935.00, and a one-time civil penalty in the amount of $128,792.00 for his trading. Camp consented to the entry of the Final Judgment without admitting or denying the allegations in the complaint.

On October 5, Judge Schwab entered Final Judgments against Johnston, a resident of Syracuse, New York, and James L. Jerome and Brandt A. England, residents of Las Vegas, Nevada. Without admitting or denying the allegations in the complaint, Johnston, Jerome and England consented to the entry of Final Judgments in which they are permanently enjoined from future violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder. Johnston also agreed to pay disgorgement of $26,503.48, plus prejudgment interest of $9,241.74, a civil penalty in the amount of $49,374.19 for trading and tipping five family members and friends. The Final Judgment did not order him to pay an additional $22,870.70 civil penalty based on his financial condition. Jerome agreed to pay disgorgement of $46,246.00, plus prejudgment interest of $16,853.20, and a civil penalty in the amount of $46,246.00 for trading and tipping England. The Final Judgment did not order him to pay an additional $51,158.00 civil penalty based on his financial condition. England agreed to pay disgorgement of $51,158.00, plus prejudgment interest of $18,643.25, and a one-time civil penalty in the amount of $51,158.00 for his trading.

In a related criminal action, on August 5, Queri Jr., Gosson and Camp were indicted by the U.S. Attorney's Office for the Northern District of New York on, among other things, criminal charges of insider trading in connection with Dick's acquisition of Galyan's.

The Commission acknowledges the assistance and cooperation of the Financial Industry Regulatory Authority.

For additional information, please see Litigation Release Nos. 20765 (October 1, 2008), 20895 (February 10, 2009), and 21008 (April 21, 2009).

 

http://www.sec.gov/litigation/litreleases/2009/lr21246.htm


Modified: 10/09/2009