SECURITIES AND EXCHANGE COMMISSION Washington, D.C. Litigation Release No. 15691 /April 1, 1998 SEC v. ARJUN SEKHRI, AMOLAK SEHGAL, PRATIMA RAJAN, FUAD DOW, GORDON W. COCHRANE AND MARTIN L. THIFAULT, defendants, and MAHENDAR SEKHRI AND SHARDA SEKHRI, relief defendants, Civil Action No. 98-2320-Civ. (S.D.N.Y.)(filed April 1, 1998) The Securities and Exchange Commission today announced the filing of an insider trading case against Arjun Sekhri, a former investment banking associate at Salomon Smith Barney, Inc. in New York City, and five other individuals to whom Sekhri supplied confidential information, including his father-in-law. The complaint alleges that, from September 1997 through January 1998, Sekhri, Amolak Sehgal, Pratima Rajan, Fuad Dow, Gordon W. Cochrane and Martin L. Thifault engaged in a highly profitable insider trading scheme by collectively purchasing call options and/or common stock shortly before six major corporate announcements. The defendants reaped total profits of at least $1.8 million from their illegal securities transactions. Also today, the U.S. Attorney's Office for the Southern District of New York unsealed complaints charging Sekhri, Sehgal, Dow, and Thifault with insider trading and conspiracy to commit insider trading. It also announced the arrests of Sehgal, Dow, and Thifault on those charges. The SEC's complaint alleges that Sekhri, the source of the inside information, was an investment banking associate at Salomon at the time of the trading. Salomon provided investment banking services in each of the relevant corporate transactions and Sekhri worked specifically on at least one of those transactions. Sekhri tipped Dow, Sekhri's former college roommate. Dow then tipped Cochrane and Thifault, all three of whom collectively purchased common stock and/or call options on the stock of MCI Communications Corp., Brooks Fiber Properties, Inc., Carson Pirie Scott & Co., Inc., Central and South West Corp., and Southern New England Telecommunications Corp. in advance of six different public announcements of significant mergers involving these companies. Sekhri also tipped Sehgal, his father-in-law, in advance of at least four of these announcements, and Rajan, his friend, in advance of at least three of these announcements. The SEC filed its complaint in the United States District Court for the Southern District of New York. The complaint alleges that the defendants violated the anti-fraud provisions of the federal securities laws (specifically, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder), and seeks, among other things, permanent injunctions, disgorgement, interest and penalties. The complaint also seeks disgorgement from relief defendants Mahendar and Sharda Sekhri, Arjun Sekhri's parents, of assets transferred to them by Dow and Sehgal. Earlier today, the Honorable Robert P. Patterson, United States District Judge, granted emergency relief requested by the SEC, in the form of a temporary restraining order and an asset freeze. The SEC acknowledges the valuable assistance of the Chicago Board Options Exchange and the New York, Pacific, and Philadelphia Stock Exchanges in this matter. NEWS DIGEST SEC CHARGES FORMER SALOMON SMITH BARNEY, INC. INVESTMENT BANKING ASSOCIATE AND FIVE OTHERS WITH INSIDER TRADING The Securities and Exchange Commission today announced the filing of an insider trading case against Arjun Sekhri, a former investment banking associate at Salomon Smith Barney, Inc. in New York City, and five other individuals to whom Sekhri supplied confidential information, including his father-in-law. The complaint alleges that, from September 1997 through January 1998, Sekhri, Amolak Sehgal, Pratima Rajan, Fuad Dow, Gordon W. Cochrane and Martin L. Thifault engaged in a highly profitable insider trading scheme by collectively purchasing common stock and/or call options on the stock of MCI Communications Corp., Brooks Fiber Properties, Inc., Carson Pirie Scott & Co., Inc., Central and South West Corp., and Southern New England Telecommunications Corp. in advance of six different public announcements of significant mergers involving these companies. The defendants reaped total profits of at least $1.8 million from their illegal securities transactions. Also today, the U.S. Attorney's Office for the Southern District of New York unsealed complaints charging Sekhri, Sehgal, Dow, and Thifault with insider trading and conspiracy to commit insider trading. It also announced the arrests of Sehgal, Dow, and Thifault on those charges. The SEC filed its complaint in the United States District Court for the Southern District of New York. The complaint alleges that the defendants violated the anti-fraud provisions of the federal securities laws (specifically, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder), and seeks, among other things, permanent injunctions, disgorgement, interest and penalties. The complaint also seeks disgorgement from relief defendants Mahendar and Sharda Sekhri, Arjun Sekhri's parents, of assets transferred to them by Dow and Sehgal. Earlier today, the Honorable Robert P. Patterson, United States District Judge, granted emergency relief requested by the SEC, in the form of a temporary restraining order and an asset freeze. Persons to Contact: William R. Baker, Associate Director Division of Enforcement, (202) 942-4570 Paul Huey-Burns, Assistant Director Division of Enforcement, (202) 942-4649