SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16851 / January 3, 2001
Securities and Exchange Commission v. Timothy J. Sullivan, James G. Appleton, Lance P. Lins and James A. Budzinski, (U.S.D.C. E.D. Wis., Civil Action No. 00-C-1299).
The Securities and Exchange Commission announced that on December 21, 2000, the United States District Court for the Eastern District of Wisconsin entered a Final Judgment and Order of Permanent Injunction, Civil Penalties and other Equitable Relief ("Final Judgment") against Timothy J. Sullivan ("Sullivan"), James G. Appleton ("Appleton"), Lance P. Lins ("Lins"), and James A. Budzinski ("Budzinski") in an insider trading action. The Commission's Complaint, filed on September 28, 2000, alleged that during the last weekend in July 1997, Sullivan, the President, Chief Financial Officer and a director of Sullivan Dental Products, Inc. ("Sullivan Dental"), tipped Appleton, Lins and Budzinski about an impending merger between Sullivan Dental and Henry Schein, Inc. The Complaint further alleged that during the following week, Appleton, Lins and Budzinski all purchased Sullivan Dental stock and in turn, tipped certain members of their families and friends, all of whom also purchased Sullivan Dental stock.
The Final Judgment, entered pursuant to Sullivan, Appleton, Lins and Budzinski's consents and without admitting or denying the allegations contained in the Commission's Complaint, enjoins Sullivan, Appleton, Lins and Budzinski from future violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition, the Final Judgment requires Sullivan, Appleton, Lins and Budzinski to pay disgorgement, representing the realized and unrealized profits from their purchases and/or their tippees' purchases of Sullivan Dental stock, plus prejudgment interest thereon, and civil penalties under Section 21A of the Exchange Act. Specifically, the Final Judgment requires that: (1) Sullivan pay disgorgement of $14,218.75, plus prejudgment interest of $4,219.36 and a civil penalty of $62,581.25; (2) Appleton pay disgorgement of $132,928.75, plus prejudgment interest of $39,446.09 and a civil penalty of $132,928.75; (3) Lins pay disgorgement of $10,325.00, plus prejudgment interest of $3,063.90 and a civil penalty of $24,543.75; and (4) Budzinski pay disgorgement of $17,210.13, plus prejudgment interest of $5,107.04 and a civil penalty of $17,210.13.
For further information, see Litigation Release No. 16737 (September 28, 2000).