U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21303 / November 18, 2009
Securities and Exchange Commission v. Francis Elias Axiaq, Case No. C-08-CV-4637 (CRB) (N.D. Cal. filed October 7, 2008)
Remaining Defendant in Restoration Hardware Insider Trading Scheme Permanently Enjoined From Future Violations And Ordered To Pay $1,190,102 In Disgorgement And Penalty
The Securities and Exchange Commission today announced that the Honorable Charles R. Breyer, United States District Judge for the Northern District of California, entered Final Judgment as to Defendant Francis Axiaq, of Millbrae, California on November 17, 2009. Axiaq is the final defendant in the above-listed insider trading litigation.
Pursuant to the judgment, Axiaq was permanently enjoined from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court ordered disgorgement of $881,102 against Axiaq, with prejudgment interest of $59,000. In addition, the Court imposed a civil penalty of $250,000, for a total payment of $1,190,102. Axiaq consented to the entry of the judgment without admitting or denying the allegations of the Commission's Complaint.
The Commission's Complaint, filed on October 7, 2008, alleged fraud in connection with insider trading in the securities of Corte Madera, Calif.-based Restoration Hardware, Inc. According to the SEC's complaint, Restoration Hardware's Vice President of Treasury, Ciriaco "Eric" Rivor of Millbrae, Calif., learned in mid-2007 that the company was about to be acquired by a private equity firm at a substantial premium. Rivor allegedly passed the confidential, non-public information to his friend Emmanuel Axiaq of San Carlos, Calif., and told Emmanuel Axiaq to pass the information to his father, Francis Axiaq. Rivor instructed the Axiaqs to limit the size of their Restoration Hardware stock purchases to prevent detection.
Francis Axiaq allegedly ignored Rivor's instruction to limit the size of his stock purchases and spent the following weeks amassing nearly 250,000 shares of Restoration Hardware stock. When Restoration Hardware publicly announced the acquisition on November 8, 2007, its stock price soared more than 140 percent and gave Francis Axiaq illicit potential profits of $881,102. Francis Axiaq later sold all of his Restoration Hardware shares for realized profits of approximately $406,000.
Final judgments have previously been entered against all other defendants.
See also: LR 20774 (October 7, 2008)