Litigation Release No. 19697 / May 12, 2006

SEC v. Anthony C. Sudol III, Michael G. Sudol and Richard J. Sudol, Civil Action No. C-05-1299 (N.D. Cal.)

SEC Settles Insider Trading Case With Former Cisco Employee and His Two Brothers

The Securities and Exchange Commission ("Commission") announced that on May 10, 2006, the Honorable Jeffrey S. White, U.S. District Court Judge for the Northern District of California, entered Final Judgments against Anthony C. Sudol III, Michael G. Sudol and Richard J. Sudol. Without affirming or denying the allegations in the Commission's complaint, the brothers consented to the entry of the Final Judgments that permanently enjoin them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the Final Judgments order Anthony Sudol to pay a penalty of $150,000, order Michael Sudol to pay disgorgement, prejudgment interest and a penalty amounting to $200,275, and order Richard Sudol to pay disgorgement and prejudgment interest amounting to $258,982, but waives payment of this amount and does not impose a civil penalty based on Richard Sudol's inability to pay as documented by sworn financial statements and other documents he submitted to the Commission.

On March 31, 2005, the Commission filed a complaint alleging that Anthony Sudol, a former employee of Cisco Systems, Inc., on five separate occasions between April 1999 and November 2003, tipped his brothers, Michael and Richard Sudol with material non-public information concerning upcoming Cisco acquisitions. The complaint further alleges that Michael and Richard Sudol purchased shares in certain of the companies in advance of the acquisition announcements, and sold in the aftermath of the announcements.

The Commission expresses its appreciation to the NASD for assistance in the investigation of this matter.

See also: L.R. No. 19162 (March 31, 2005).