SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16648 / August 9, 2000
Securities and Exchange Commission v. Watson King, et al. (U.S.D.C.)(W.D.Va.) Civil Action No. 7:00CV00622
SEC FILES AND SETTLES INSIDER TRADING CASE
The Securities and Exchange Commission announced today that on August 7, 2000 it filed a settled case alleging illegal insider trading in the stock of Steel of West Virginia, Inc. just before Roanoke Electric Steel Corp. ("RESCO") announced that it would make a tender offer for the company's shares. The Commission named three defendants in the case: Watson King, of Roanoke, Virginia, Stirling Minter of Salem, Virginia, and Edmund Byrd of Roanoke, Virginia.
The Commission's Complaint in this matter alleges that on July 20, 1998, Watson King learned of the then proposed tender offer in the course of his employment as a vice president at RESCO and that he tipped two his friends and golfing partners, Minter and Byrd. Prior to the public announcement of the tender offer, Minter purchased 30,400 shares of SWVA common stock and he recommended the stock to his son, who purchased 5,000, and Byrd purchased 4,000 shares. As a result of the public announcement of the tender offer, Minter made profits of $95,760, his son made $17,500 and Byrd made $13,140.
Without admitting or denying the allegations of the Complaint, King, Minter and Byrd consented to the entry of final judgments which would permanently enjoin them from future violations of antifraud and tender offer provisions of the federal securities laws (Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder), and which would (1) order King to pay a civil penalty of $108,900; (2) order Minter to disgorge his and his sons trading profits of $112,960 plus prejudgment interest of $13,2000 and pay a civil penalty of $112,960; and (3) order Byrd to disgorge profits of $13,140, plus prejudgment interest of $1,537.81 and pay a civil penalty of $13,140. The proposed final judgments are under review by the Court.
The Commission acknowledges the assistance of NASD Regulation in this matter.