U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23281 / June 11, 2015
Securities and Exchange Commission v. Charles Raymond Langston III, CRL Management, LLC, and Guarantee Reinsurance, Ltd., Civil Action No. 1:13-CV-24360-CV-Graham (S.D. Fla)
District Court Enters Final Judgment Setting Monetary Amounts Against Charles Raymond Langston III and Related Entities for Rule 105 Violations
The Securities and Exchange Commission announced that on May 26, 2015, the Honorable Donald L. Graham, United States District Judge for the Southern District of Florida entered a Final Judgment ordering Defendants Charles Raymond Langston III, CRL Management, LLC, and Guarantee Reinsurance, Ltd. (collectively "Defendants") to jointly and severally pay $912,854 disgorgement, $148,981 prejudgment interest and $502,069 civil money penalty to resolve the Commission's monetary claims relating to Rule 105 of Regulation M of the Securities Exchange Act of 1934 ("Exchange Act"). The Defendants consented to the relief without admitting or denying the Commission's allegations.
The Commission's complaint, filed on December 3, 2013, alleged that Langston engaged in insider trading and that the Defendants violated Rule 105 of Regulation M, which prohibits the short sale of an equity security during a restricted period - generally five business days before a public offering - and the purchase of that same security through the offering. The Commission alleged that Langston through Guarantee Reinsurance and his other company CRL Management made short sales in advance of separate secondary offerings by Wells Fargo, Mitsubishi UFJ Financial Group, and Alcoa, and that he purchased shares in the same offerings.
The SEC's complaint charged Langston with violating Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) and Rule 10b-5 of the Exchange Act by engaging in illegal insider trading and charged the Defendants with violating Rule 105 of Regulation M of the Exchange Act for prohibited short sales. The Defendants agreed to settle these charges, without admitting or denying the allegations. On December 5, 2013, the Court permanently enjoined Langston from violating Section 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act and the Defendants from violating Rule 105 of Regulation M of the Exchange Act; ordered Langston to pay disgorgement of $193,108, prejudgment interest of $22,204, and a civil money penalty of $193,108 for the insider trading violation; and left for future resolution the amount the Defendants should pay to resolve the Commission's monetary claims relating to Rule 105 of Regulation M of the Exchange Act.
For additional information, see LR-22882/Dec. 3, 2013.