SECURITIES AND EXCHANGE COMMISSION Washington, D.C. LITIGATION RELEASE NO. 15429 / August 4, 1997 SECURITIES AND EXCHANGE COMMISSION v. SAMIR TRABOULSI, ET AL., 97 Civ. 5759 (RLP) (S.D.N.Y.) The Securities and Exchange Commission ("Commission") filed today an insider trading complaint against seven foreign nationals and two foreign entities. The complaint charges Samir Traboulsi, Charbel Ghanem, Socofinance SA, International Discount Bank & Trust (West Indies) Ltd, Alain Boublil, Max Theret, Robert Reiplinger, Patrick Gruman and Jean- Pierre Emden with tipping and/or insider trading in the securities of Triangle Industries, Inc. shortly before a November 21, 1988 tender offer by Pechiney Corporation, an entity owned by the French state. The complaint seeks disgorgement of approximately $6.5 million in illegal trading profits plus prejudgment interest and permanent injunctions against future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The Commission also announced settlements pursuant to which approximately $1.35 million of illegal profits and interest will be disgorged. The Complaint alleges the following facts concerning insider trading and tipping by the defendants: * Traboulsi, a Lebanese national who resided in Paris, France and served as an advisor to Triangle during the tender offer negotiations, tipped his friends Ghanem and Boublil about the tender offer. * Ghanem, a Swiss national born in Lebanon, who was a founder and director of Socofinance, a Swiss currency brokerage firm, then directed the purchase of 91,000 shares of Triangle stock in the account of International Discount Bank at Socofinance, both entities that he controlled. After the tender offer those securities were sold for profits of approximately $3.65 million. Those profits are being retained pursuant to an order of the government of Switzerland. * Boublil, a French national who was then the Chief of Staff to the French Minister of Budget, Economics and Finance, obtained material nonpublic information concerning the transaction through his employment as well as from Traboulsi. He disclosed material nonpublic information concerning the impending tender offer to the late Roger-Patrice Pelat, a close friend and business acquaintance. * Pelat, a French financier, purchased a total of 30,000 shares of Triangle stock, which he sold after the tender offer announcement for profits of approximately $1.1 million. Pelat also tipped Theret and Reiplinger. Pelat, who is now deceased, is not named as a defendant in the Complaint. However, Pelat placed most of his trades through an institution in Switzerland, and those profits are being retained pursuant to an order of the Swiss government. By agreement with, among others, the institution through which Pelat placed his trades, those funds will be disgorged and paid into the Court in this action. * Theret and Reiplinger, French financiers and then partners in the investment firm of Compagnie Parisienne de Placements (CPP), directed their employee Gruman to purchase 6 million French francs (approximately $1.25 million) of Triangle stock for CPP. Gruman ordered 100,000 shares of Triangle for CPP, but only 32,200 shares could be purchased due to the thin market for Triangle's shares. In addition, Reiplinger bought 2,000 shares of Triangle for himself through a Swiss bank. Reiplinger sold his shares for profits of approximately $82,000, and CPP tendered its shares to Pechiney for profits of approximately $1.4 million. Reiplinger's personal profits are being retained pursuant to an order of the Swiss government. * Gruman told Emden, with whom he had a business and personal relationship, that CPP had placed a large order for Triangle stock. Emden, while in possession of material nonpublic information concerning that order, and using a pseudonym, placed an order for 40,000 shares of Triangle stock through a Swiss bank. He was only able to obtain 6,000 shares due to the thin market. After the tender offer he sold his shares for profits of approximately $244,000. Emden's profits are frozen by the Swiss government pending the resolution of the SEC's claims. According to the Complaint, each of the individual defendants was convicted of criminal offenses in France arising out of the events alleged in the Complaint. In particular, Traboulsi, Boublil and Gruman were convicted of improperly communicating material nonpublic information to others, and Ghanem, Theret, Reiplinger and Emden were convicted of receiving stolen information. Those convictions were affirmed by the French Supreme Court of Appeals on October 26, 1995. The Complaint alleges that because the issues of fact in the French criminal proceedings are identical to the issues alleged in the Complaint, each of the defendants are collaterally estopped from contesting the factual findings underlying the decisions of the French courts. The Complaint seeks permanent injunctions against all of the defendants for violations of Section 10(b) of the Exchange Act and Rule 10b-5, and against Traboulsi, Ghanem, Socofinance, IDB, Boublil, Theret, and Reiplinger for violations of Section 14(e) of the Exchange Act and Rule 14e-3, and disgorgement of the illegal trading profits, together with prejudgment interest. Simultaneously with the filing of the Complaint, defendants Traboulsi and Gruman, without admitting or denying the allegations made in the Complaint, consented to the entry of permanent injunctions enjoining them from violations of Section 10(b) of the Exchange Act and Rule 10b-5, and in addition, in the case of Traboulsi, from violations of Section 14(e) of the Exchange Act and Rule 14e-3. Traboulsi also agreed to pay $250,000 in disgorgement representing a portion of the proceeds of the Triangle transactions of his direct and indirect tippees. In light of Gruman's demonstrated inability to pay based on his sworn representations in his statement of financial condition, the Commission agreed that disgorgement of $244,417 realized by his tippee Emden would be waived as to him. The Commission also moved the Court to direct the clerk to accept payment of additional disgorgement in the amount of $1,098,760 representing profits and prejudgment interest realized on certain trades by the late Roger-Patrice Pelat. ======END OF PAGE 2====== The Commission acknowledges the assistance of the Swiss Federal Office of Police Matters in this investigation. ======END OF PAGE 3======