United States Securities and Exchange Commission
Litigation Release No. 16844 / December 28, 2000
SEC v. HAROLD W. ANDREWS SR. AND HAROLD W. ANDREWS JR., U. S. District Court for the District of Columbia, 1:00CV03101(CKK)
SEC SETTLES WITH TWO FOR INSIDER TRADING BEFORE SUN/REGENCY TENDER OFFER
The Securities and Exchange Commission today filed an insider trading Complaint in the United States District Court for the District of Columbia against Harold W. Andrews Sr. ("Andrews Sr.") and Harold W. Andrews Jr. ("Andrews Jr."). The Complaint alleges that Andrews Jr., who was controller and vice president of finance at Regency Health Services ("Regency"), tipped his father, Andrew Sr., that Sun Healthcare Group, Inc. ("Sun") would commence a tender offer for Regency. The Complaint further alleges that Andrews Sr. bought 7,127 shares of Regency stock before the tender offer was announced. Simultaneously with the filing of the Complaint, Andrews Sr. consented to a permanent anti-fraud injunction and agreed to disgorge $52,561.62 in trading profits and prejudgment interest thereon, and pay a $52,561.62 civil penalty, totaling $121,743.08. Andrews Jr. consented to a permanent anti-fraud injunction and agreed to pay a $52,561.62 civil penalty. Both defendants settled without admitting or denying the Complaint's allegations.
Specifically, the Complaint alleges the following:
The Complaint alleges that the defendants violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 14e-3 thereunder. Simultaneously with the filing of the Complaint, the defendants, without admitting or denying the allegations of the Complaint, consented to the entry of Final Judgments enjoining them from future violations of Exchange Act Sections 10(b) and 14(e), and Rules 10b-5 and 14e-3 thereunder; and requiring Andrews Sr. to disgorge his illegal trading profits which, together with prejudgment interest, total $69,181.46, and requiring Andrews Sr. and Andrews Jr. to pay civil penalties of $52,561.62 each.
The Commission acknowledges the assistance of the New York Stock Exchange and Chicago Board Options Exchange in this matter.