United States Securities and Exchange Commission
Litigation Release No. 16404 /January 10, 2000
SEC v. Gonzalo Silveira, Fernando Latorre, Joseph Domine, Gregory Jack, Timothy Madden, Ignacio Latorre, Jorge Clement and Diego Harte, Civil Action No. 00-20029 (JW)(U.S. District Court for the Northern District of California)
(San Jose Division)
SEC Sues Eight Individuals for Illegal Tipping and Insider Trading
in Advance of the Affymax/Glaxo Tender Offer
The Securities and Exchange Commission announced today that on January 7, 1999, it filed an insider trading action against eight individuals for illegal tipping and insider trading in the securities of Affymax, N.V., a drug discovery company located in Palo Alto, California, in advance of the January 26, 1995 announcement of a tender offer by the international pharmaceutical giant, Glaxo plc (now Glaxo Wellcome plc).
The Commission's Complaint alleges that Gonzalo Silveira was the personal money manager for the CEO of Affymax prior to its acquisition by Glaxo. Silveira misappropriated material, nonpublic information concerning the tender offer. Although Silveira did not trade, he tipped his friend Fernando Latorre. Fernando Latorre in turn tipped a co-worker, Timothy Madden, a friend, Joseph Domine, and a brother, Ignacio Latorre. Madden and Domine realized profits of $24,000 and $9,692, respectively, by trading on the inside information. Domine also tipped his friend Gregory Jack, who realized $13,807 in illegal trading profits. Ignacio Latorre tipped two co-workers, Jorge Clement and Diego Harte. Profits generated by Clement's and Harte's improper trading amounted to at least $150,000.
Defendants Silveira, age 42, Domine, age 31, Madden, age 31, and Jack, age 31, live in California; defendants Fernando Latorre, age 37, Ignacio Latorre, age 31, Clement, age 28, and Harte, age 34, live in Argentina. All four domestic defendants agreed to settle the charges without admitting or denying the allegations in the Complaint. Silveira, Domine, Madden and Jack consented to the entry of Final Judgments and Undertakings permanently enjoining them from violating anti-fraud provisions of the federal securities laws which prohibit insider trading (Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder). Those defendants also consented to appear as witnesses at depositions and trial. Silveira consented to pay a $200,000 penalty, Madden consented to disgorge his illegal profits, and Domine and Jack consented to disgorge their illegal profits plus prejudgment interest. Total monetary settlements amount to approximately $250,000. The four foreign defendants have not settled, and the Commission's litigation against them continues.
This action concludes the Commission's investigation of trading in Affymax securities. For summaries of prior related actions, see Litigation Release Nos. 15843 (August 12, 1998), 15750 (May 20, 1998), 15040 (September 12, 1996), and 14752 (December 12, 1995).