SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16196 / June 28, 1999
SEC v. EURO SECURITY FUND, MARIO MERELLO, FABRIZIO PESSINA, COIM SA, FRANCESCO MAROTTA, PICTET & CIE-GENEVA, GIOVANNI PIACITELLI, PIERRE BOTTINELLI, RON SLEEGERS, INTERNATIONAL STRUCTURES CONSULTING B.V., URS HELLER, MRS. URS HELLER, MEINDERT PANAGIOTIS HAKKERT, FRANCK HAKKERT, H.J.M. DE BOER, C.J. BROEKEMA, E.H. VAN GEENEN, HENDRIK MARINUS BOUWMEESTER, HANS P. ROMANESKO, MRS. A. VERKAIK, AND ONE OR MORE UNKNOWN PURCHASERS OF COMMON STOCK OF ELSAG BAILEY PROCESS AUTOMATION, N.V., Civil Action No. 98 Civ. 7347 (S.D.N.Y.) (DLC, MHD)
SEC v. ANGELUS TRADING, INC., Civil Action No. 99 Civ. 4575 (S.D.N.Y.) (DLC) (filed June 24, 1999)
SEC OBTAINS ALMOST $11 MILLION IN INSIDER TRADING SETTLEMENTS WITH EUROPEAN-BASED INVESTMENT FUNDS
The Securities and Exchange Commission announced that on June 25, 1999, Judge Denise L. Cote of the U.S. District Court for the Southern District of New York signed final judgments in two insider trading cases requiring, among other things, payment of almost $11 million in settlement of the SECís illegal insider trading charges against two European-based investment funds.
In the first case, the SEC alleged in an amended complaint filed on November 17, 1998, that Euro Security Fund illegally purchased a substantial amount of stock in Elsag Bailey Process Automation, N.V. through a Swiss brokerage account in advance of the October 14, 1998 announcement that ABB Asea Brown Boveri Ltd. agreed to a cash tender offer for Elsag. The SEC alleged that Euro is a British Virgin Islands company operating as a private investment fund in Switzerland. Euro bought the Elsag stock through Schroder & Co. Inc., a U.S. brokerage firm located in New York City with offices in Switzerland. Judge Cote earlier had issued an opinion in this case finding that Euroís Swiss-based officers were subject to U.S. jurisdiction because Euro bought the Elsag stock on the New York Stock Exchange, among other reasons.
Without admitting or denying the SECís substantive allegations, Euro consented to the entry of a final judgment permanently enjoining it from violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Euro has agreed to pay disgorgement of $3,892,254.62 in trading profits plus prejudgment interest of $35,000.00, and $3,892,254.62 in civil penalties.
As part of the settlement, Fabrizio Pessina, Mario Merello, officers of Euro, COIM SA, and Francesco Marotta, the principal of COIM, were dismissed "without prejudice" as defendants in this case. COIM by agreement was ordered to disgorge $15,526.15, which the SEC alleged represents illegal insider trading profits.
The SECís litigation in this case continues against the remaining 15 defendants and one or more unknown other persons or entities. For more information about this case please see Litigation Release No. 15942 (October 20, 1998) and Litigation Release No. 15981 (November 19, 1998).
In the second case, the SEC alleged in a complaint filed on June 24, 1999, that Angelus Trading, Inc. illegally purchased a substantial amount of Elsag stock through a Swiss brokerage account in advance of the same October 14, 1998 announcement. The SEC alleged that Angelus is a British Virgin Islands company operating as a private investment fund in Switzerland. Angelus bought the Elsag stock through a COIM brokerage account at Schroder.
Without admitting or denying the SECís substantive allegations, Angelus consented to the entry of a final judgment permanently enjoining it from violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Angelus agreed to pay disgorgement of $1,509,594.88 in trading profits plus prejudgment interest of $14,000.00, and civil penalties of $1,509,594.88.http://www.sec.gov/litigation/litreleases/lr16196.htm