LITIGATION RELEASE NO. 16978 / April 30, 2001
Securities and Exchange Commission v. Parvin Gidvani, Civil Action No. H-00-1013 (S.D. Tex. March 22, 2001)
COURT ORDERS PARVIN GIDVANI, FORMER EMPLOYEE OF OWEN HEALTHCARE, INC., TO PAY $305,984 IN AN INSIDER TRADING CASE
The Securities and Exchange Commission ("Commission") announced today that on March 22, 2001, in Securities and Exchange Commission v. Parvin Gidvani, Civil Action No. H-00-1013 (S.D. Tex.), U.S. District Court Judge Lynn N. Hughes of the U.S. District Court for the Southern District of Texas entered a Final Judgment granting the Commission's motion for summary judgment and finding that Parvin Gidvani, a former employee of Owen Healthcare, Inc. ("Owen") was liable for insider trading in violation of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Gidvani was ordered to disgorge all of his illegal trading profits and the illegal trading profits of his two tippees, in an aggregate amount of $104,500. He was also ordered to pay interest of $44,734 on that disgorgement and to pay a civil penalty of $156,750. In granting the Commission's motion, the Court described Mr. Gidvani's arguments in opposition as a "smokescreen" of "categorical falsehoods" and "false accusations."
The Commission's complaint charged Mr. Gidvani with insider trading in connection with the 1996 acquisition of Owen by Cardinal Health, Inc. The Commission alleged that during the course of his employment with Owen, Gidvani acquired material, nonpublic information concerning the acquisition. The Commission further alleged that, on the basis of that information, Gidvani purchased shares of Owen prior to the November 27, 1996, public announcement of the acquisition. He sold those shares after the announcement, realizing illegal profits of $23,500. The complaint further alleged that Gidvani recommended Owen to two of his friends. They also purchased shares in Owen prior to the announcement and sold their shares afterwards, realizing profits of $41,250 and $39,750, respectively.
Gidvani has noticed an appeal to the U.S. Court of Appeals for the Fifth Circuit.
See Lit. Rel. No. 16482 (March 23, 2000).