U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23257 / May 11, 2015
Securities and Exchange Commission v. Timothy J. McGee, et al., Civil Action No. 12-cv-1296 (E.D. Pa.)
SEC Increases Settlements Total to More Than $2 Million in Insider Trading Case
The Securities and Exchange Commission today announced that an alleged insider trader and his wife have agreed to a settlement of an enforcement action filed by the agency in 2012. Coupled with prior settlements reached with others in the group of trading participants, the SEC has now obtained more than $2 million in monetary remedies in this case.
In consent judgments approved by the U.S. District Court for the Eastern District of Pennsylvania, Michael W. Zirinsky agreed to fully disgorge his alleged ill-gotten gains of $46,396 from insider trading in the stock of Philadelphia Consolidated Holding Corp. (PHLY) based on nonpublic information about the company's impending merger with Tokio Marine Holdings. He must pay $10,922 in prejudgment interest and a $192,054 penalty, for a total settlement payment of $ 249,372. Zirinsky is enjoined from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Relief defendant Kellie Zirinsky, who was not accused of any wrongdoing, is required to disgorge nearly $50,000 in gains she received from her husband's fraudulent trading.
In March 2015, the court approved settlements with four other relief defendants named in the SEC's complaint: Michael Zirinsky's father, mother, sister, and grandmother. Collectively, they were required to disgorge more than $460,000 profits from Zirinsky's trading in PHLY stock.
In April 2015, the court granted the SEC's request for summary judgment against McGee with financial remedies still to be determined.
The SEC previously announced settlements totaling more than $1.3 million with Hong Kong residents Paolo Lam and Marianna sze wan Ho when the case was filed in 2012.
The SEC's litigation has been led by John V. Donnelly III, Nuriye C. Uygur, and David L. Axelrod of the SEC's Philadelphia Regional Office, and has been supervised by G. Jeffrey Boujoukos.
For additional information, see Litigation Release No. 22288 (March 14, 2012)