Litigation Release No. 19429 / October 13, 2005

Securities and Exchange Commission v. Robert B. Petrosky, Civil Action No. SA-05-CA1000-FB (USDC W.D. TX)


The Securities and Exchange Commission ("Commission") on October 12, 2005, charged Robert B. Petrosky ("Petrosky") with insider trading based on his purchase of Premcor, Inc. ("Premcor") stock while in possession of material non-public information concerning Valero Energy Corporation's ("Valero") intention to acquire Premcor. Simultaneous with the filing of the Commission's complaint, and without admitting or denying the allegations, Defendant Petrosky consented to a court order enjoining him from future violations of the securities laws and ordering him to pay more than $62,000.00 in wrongful trading profits and penalties.

The Commission's complaint alleges that Petrosky learned of Valero's intent to acquire Premcor during a dinner conversation with his wife, a Valero employee. Subsequent to learning this material non-public information, and without his wife's knowledge, Petrosky purchased 3,800 shares of Premcor stock between March 17 and April 22, 2005. On April 25, 2005, when Valero announced its planned acquisition of Premcor, Petrosky liquidated his 3,800 shares of Premcor stock realizing $41,381.85 in illegal trading profits.

In addition to disgorging his trading profits, Petrosky agreed to pay a civil penalty of $20,690.91, equal to one-half of his profits. Petrosky also agreed to the entry of a permanent injunction prohibiting him from violations of the antifraud provisions of the securities laws, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In accepting Petrosky's settlement, the Commission took into account his significant cooperation in the staff's investigation, including the fact that he voluntarily came forward, reported his trades, and worked promptly with the staff to resolve the matter.