Litigation Release No. 16486 \ March 24, 2000


The Securities and Exchange Commission ("Commission") announced that on March 8, 2000, the Honorable Edward Rafeedie, United States District Judge for the Central District of California, entered a final judgment of permanent injunction and other relief against Raymond G. Kolts ("Kolts"), an attorney and resident of Glendale, California. The Commission charged Kolts with insider trading in the securities of Trimedyne, Inc. ("Trimedyne"). Kolts, age 48, is a member of the California Bar and is currently of counsel at the law firm of Knapp, Petersen & Clarke. The final judgment permanently enjoins Kolts from future violations of the antifraud provisions of the federal securities laws and requires payment of disgorgement and of pre-judgment interest on insider trading profits plus civil penalties. Kolts consented to the entry of the final judgment without admitting or denying the allegations in the Commission's complaint.

In its complaint, the Commission alleged that Kolts purchased stock in Trimedyne based upon nonpublic information about an action taken by the Food and Drug Administration ("FDA"). Kolts was a principal of the law firm of Kolts & Nawa, which represented Trimedyne in a product liability lawsuit at the time of the violations. In early 1996, Trimedyne was awaiting FDA clearance of its application to market its Urolase side firing laser. Trimedyne retained Kolts and his law firm to represent the company in a product liability lawsuit involving the Urolase. One of Trimedyne's officers was deposed in the lawsuit two days after the FDA issued its clearance to market the Urolase but prior to Trimedyne's public announcement of that clearance. In the course of representing the officer in her deposition, Kolts learned of the FDA clearance. The Commission alleged that Kolts then misused that material nonpublic information by purchasing shares of Trimedyne stock. Shortly after Trimedyne issued its press release announcing the FDA clearance, Kolts sold his Trimedyne stock for a profit of $30,187.50.

Kolts, without admitting or denying the allegations in the complaint, consented to entry of a judgment permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, requiring payment of disgorgement of $30,187.50, payment of pre-judgment interest of $6,643.68, and payment of civil penalties of $30,187.50.