SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16903 / February 21, 2001
SECURITIES AND EXCHANGE COMMISSION V. DANIEL J. LAGERMEIER, U.S. District Court for the District of Minnesota, Civil Action No. C 01-318 (D. Minn. February 21, 2001)
The Commission today filed insider trading charges in the United States District Court for the District of Minnesota against Daniel J. Lagermeier (Lagermeier), a resident of Eden Prairie, Minnesota, for trading in the securities of Best Buy, Inc. (Best Buy), also of Eden Prairie. The Complaint alleges that in February 1998, Lagermeier purchased Best Buy options after he learned of Best Buy's non-public earnings projections. The value of the options, which he bought for over $46,000, increased significantly after the information was released by the company.
The Commission alleges that in February 1998, Lagermeier supervised Best Buy's Planning and Analysis Group. In early February, the Planning and Analysis Group prepared financial statements for use at a Board of Directors' Meeting on February 17, 1998. Those financial statements projected earnings for the fourth quarter and year-end that were significantly higher than those forecast by outside analysts. Lagermeier saw the financial statements before they were submitted to the board. On February 23, 1998, Lagermeier purchased 65 Best Buy option contracts for over $46,000. On March 4, 1998, Best Buy announced its earnings estimates. As a result of that announcement, Best Buy stock rose from approximately $61 to approximately $64 per share and Lagermeier's options rose in value by over $39,000.
Lagermeier has consented, without admitting or denying the allegations in the Complaint, to the entry of a Final Judgment which will enjoin him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment will also require Lagermeier to disgorge $39,812.50, representing his investment gains, plus prejudgment interest of $9,202.25. In addition, the Final Judgment will require Lagermeier to pay a civil penalty of $39,812.50 pursuant to Section 21A of the Exchange Act. The Commission wishes to thank the Chicago Board Options Exchange for its assistance in this matter.http://www.sec.gov/enforce/litigrel/lr16903.htm