U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission

Washington, D.C.

LITIGATION RELEASE NO. 16539 / May 4, 2000


Securities and Exchange Commission v. Henry T. Blackstock, U.S.D.C. for the Middle District of Florida, Civil Action No. 3:00CV472-J21C

The Securities and Exchange Commission today announced the filing of a complaint for insider trading in the securities of American HomePatient, Inc. against Henry T. Blackstock, who lives in a suburb of Birmingham, Alabama. American HomePatient is a health care company headquartered in Brentwood, Tennessee. Blackstock has been a member of the board of directors of American HomePatient for seventeen years and a member of the audit committee for eleven years. At the time of the conduct alleged in the complaint, Blackstock resided in Ponte Vedra Beach, Florida.

The complaint, filed in the U.S. District Court in Jacksonville, Florida, alleges that during September 1998, Blackstock learned material, nonpublic information about certain accounting charges that American HomePatient planned to establish that would take the company from a profit to a loss. Prior to any public announcement regarding the accounting charges, Blackstock sold 4,000 shares of American HomePatient stock held in a friend's account over which Blackstock had trading authority, at prices ranging from $7.00 to $8.75 per share. On September 30, 1998, after American HomePatient issued a press release announcing that its annual financial results would be significantly lower than expected, and that it planned to establish a significant accounting charge, the price of American HomePatient stock dropped to less than $2.00 per share. By selling the American HomePatient stock prior to the public announcement, Blackstock caused his friend to avoid losses of approximately $25,000.

The complaint filed against Blackstock seeks disgorgement, prejudgment interest and a civil monetary penalty from Blackstock, as well as an injunction against him for future violations of Section 17(a) of Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The Commission acknowledges the assistance provided by NASD Regulation, Inc.