SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17402 / March 7, 2002
SECURITIES AND EXCHANGE COMMISSION v. ANDREW W. SACHS, Civil Action No. 02CV 1810 (S.D.N.Y.) (filed March 7, 2002)
SEC SUES FORMER ANALYST
ANDREW W. SACHS FOR INSIDER TRADING
On March 7, 2002, the Securities and Exchange Commission filed a settled civil injunctive action in the United States District Court for the Southern District of New York, alleging that Andrew W. Sachs ("Sachs"), formerly an analyst with Morgan Stanley & Company ("Morgan Stanley"), engaged in insider trading prior to the August 29, 1997 public announcement that Barnett Banks, Inc. ("Barnett") would be acquired by NationsBank Corporation ("NationsBank"). Sachs is currently unemployed.
The Commission's Complaint alleges that, shortly after Sachs left Morgan Stanley in 1997, he was tipped by Ronald K. Mahabir ("Mahabir"), who was then an analyst at Morgan Stanley, with material nonpublic information about the pending acquisition of Barnett. After receiving the tip, Sachs liquidated his entire portfolio in a brokerage firm account he maintained and, through that account, on August 28, 1997, purchased 1,620 shares of Barnett stock for $87,919. The following day, on August 29, 1997, it was publicly announced that NationsBank would acquire Barnett. On the day of the public announcement, Sachs sold 1,120 of the 1,620 Barnett shares, and sold the remaining 500 Barnett shares the following Tuesday, September 2, 1997. As a result of his illegal trading, Sachs realized total profits of $19,197.
Without admitting or denying the allegations in the Commission's Complaint, Sachs has consented to pay a total of $46,008.96, representing disgorgement of $19,197, prejudgment interest in the amount of $7,614.96, and a civil penalty of $19,197. Additionally, Sachs has consented to the entry of a permanent injunction prohibiting him from further violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.