U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. LITIGATION RELEASE NO. 15990 / December 3, 1998 Securities and Exchange Commission v. Marisa Baridis, et al., 98 Civ. 8535 (JSM) (S.D.N.Y.) SEC FILES CASE AGAINST COMPLIANCE OFFICER AND OTHERS FOR INSIDER TRADING INVOLVING THE SECURITIES OF 13 COMPANIES The Securities and Exchange Commission today filed a complaint in the United States District Court for the Southern District of New York against Marisa Baridis, Jeffrey Streich, Keith Youngswick a/k/a Keith Young, and Tina Eichenholz, all of whom reside in the New York area. The Complaint alleges insider trading by the defendants in advance of public announcements concerning the securities of thirteen publicly traded companies. According to the Complaint, Baridis, a former employee in the compliance departments of two Wall Street investment firms, Smith Barney, Inc., and Morgan Stanley Dean Witter & Co., had access to material nonpublic information concerning the firms' clients, and she sold the information to Streich, a former registered representative, and Mitchell Y. Sher (Sher was the subject of an earlier enforcement action). Streich, in turn, tipped others, including Eichenholz and Youngswick. The named defendants, except for Streich, have consented, without admitting or denying the Commission's allegations, to settlements of this matter. More specifically, the Complaint alleges that: * Beginning in the summer of 1996, and continuing until October 1997, Baridis gave tips to Streich with respect to thirteen companies: Coram Healthcare, Inc.; Pacific Rehabilitation & Sports Medicine, Inc.; Owen Healthcare, Inc.; Health Images, Inc.; Capsure Holdings Corp.; Starsight Telecast, Inc.; American Medical Response, Inc.; OnTrak Systems, Inc.; Ocean Energy Inc.; Integon Corp.; Reading & Bates Corp.; Rohr Inc.; and Georgia-Pacific Corp. The tips typically included information about proposed acquisitions and other material events Baridis learned of during the course of her employment, including the name and/or stock symbol of the issuer whose securities he should purchase, the corporate event, and the anticipated public announcement date; * Based on those tips, Streich, directly or through accounts he controlled, purchased securities of eleven companies. In his personal accounts, Streich realized trading profits of $205,247, and in the accounts he controlled, he realized profits of $183,981. Of his illegal profits, he gave Baridis about $20,000 to $25,000 in cash; * Streich also tipped at least ten persons, including Eichenholz and Youngswick, a former registered representative. Streich passed on information to Eichenholz that he received from Baridis concerning the securities of nine companies, and he passed on information to Youngswick that he received from Baridis concerning the securities of eight companies. Eichenholz tipped another person, and Youngswick also tipped certain family members and friends, who then purchased certain of the securities; * Streich, Eichenholz and Youngswick, and each of their direct and indirect tippees, realized total profits of at least $1.55 million; and * Streich also engaged in a free-riding scheme pursuant to which he purchased stock without paying for it and without enough cash to buy it on margin. Simultaneous with the filing of the Complaint, defendants Baridis, Youngswick and Eichenholz, without admitting or denying the allegations in the Complaint, consented to the entry of Final Judgments permanently enjoining them from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder, and ordering them to disgorge illegal trading profits of $534,627, $340,796, and $299,556, respectively, plus prejudgment interest. Based on their demonstrated inability to pay, disgorgement was waived. As an additional part of the settlement, Baridis and Youngswick have consented to the entry of a Commission Order barring them from association with any broker, dealer, municipal securities dealer, investment adviser or investment company. The case remains pending against Streich. In related criminal cases, Baridis earlier pleaded guilty in United States District Court for the Southern District of New York to two counts of conspiracy and securities fraud, Eichenholz pleaded guilty in New York State Supreme Court to state charges of insider trading, and Youngswick pleaded guilty in New York State Supreme Court to criminal possession of stolen property. Streich pleaded guilty in New York State Supreme Court to unrelated charges. The four defendants are awaiting sentencing. The Commission acknowledges the assistance provided by the U.S. Attorney for the Southern District of New York, the District Attorney for New York County, the New York Stock Exchange, the American Stock Exchange, and the Pacific Exchange, Inc. The Commission's investigation in this matter is continuing. See Litigation Release No. 15741 (May 15, 1998) for information concerning Sher.