Litigation Release No. 16172 / June 3, 1999


Former Senior Officer of United Cities Gas Company Pays $56,370.96 To Settle SEC Charges of Insider Trading

On June 3, 1999, the Commission filed a civil complaint in the United States District Court for the District of Columbia alleging that Shirley Hawkins, a former Senior Vice President and Corporate Secretary of United Cities Gas Company("UCIT"), illegally tipped her mother about a planned merger between her company and Atmos Energy Corporation. Upon receipt of this information, Hawkins' mother, Irene Chapman, immediately purchased UCIT stock. Mrs. Chapman also tipped her husband (Hawkins' step-father) and her son (Hawkins' brother), both of whom also immediately bought UCIT stock. On July 22, 1996, after Hawkins' relatives purchased UCIT stock, the merger was publicly announced. The announcement caused the price of UCIT common stock to rise from $17.00 to $20.00 per share, representing an increase of eighteen percent. Hawkins' three relatives invested a total of $97,992 and made profits totaling $25,267.50.

The Commission's complaint specifically alleges that on July 8, 1996, UCIT's Chairman told Hawkins about the upcoming merger and told her that the information was highly sensitive and confidential. Within 90 minutes of being told, Hawkins telephoned her mother and told her about the merger. Over the next two days, on July 9 and July 10, 1996, Irene Chapman purchased a total of 2,369 shares of UCIT common stock, representing a total investment of $37,996. Her profits on the trades were $9,383.75.

The Commission's complaint further alleges that Irene Chapman tipped her husband, David Chapman, and her son, Richard Maynard, about the planned merger. On July 9 and 10, 1996, David Chapman purchased a total of 3,169 shares of UCIT stock, representing an investment of $49,996 and profits of $13,383.75. On July 11, 1996, Maynard purchased 625 UCIT shares and made profits of $2,500.

Simultaneously with the filing of the Commission's complaint, Hawkins, without admitting or denying the Commission's allegations, consented to the entry of a civil injunction prohibiting her from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering her to pay $56,370.96, consisting of $25,267.50 in disgorgement, representing the entire profits made by Irene Chapman, David Chapman and Maynard, plus prejudgment interest of $5,835.96, and a penalty of $25,267.50 pursuant to the Insider Trading Sanctions Act.