Litigation Release No. 17544 / June 5, 2002
Securities and Exchange Commission v. Thomas T. Johnson and Michael C. Dickman, Civil Action No. 02 CV 00184 L (RBB) (S.D. Cal.)
SEC SETTLES INSIDER TRADING CASE AGAINST TWO FORMER HOUSEMATES
On May 24 and 30, 2002, a federal court judge in San Diego entered Final Judgments against Thomas T. Johnson and Michael C. Dickman, respectively, concluding the Commission's action alleging insider trading in the securities of Tech Data Corporation. Both defendants settled the action without admitting or denying the allegations in the Commission's complaint. As part of the Final Judgments, the Court issued a permanent injunction prohibiting Johnson and Dickman from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court also ordered Johnson and Dickman to pay jointly and severally disgorgement in the amount of their ill-gotten gains, which totaled $105,693.44, plus prejudgment interest. The Court, however, waived the payment of disgorgement and prejudgment interest, and did not impose a civil penalty, based upon defendants' representations in their respective Sworn Financial Statement and other documents submitted to the Commission.
The Commission's complaint, filed on January 30, 2002, alleges that, as a sales manager for Tech Data, Johnson learned material, non-public information regarding a $6 billion contract that Tech Data entered into with GE Capital. Tech Data and GE Capital publicly announced their contract prior to the opening of trading on May 20, 1999. The complaint alleges that before the public announcement of this contract, Johnson tipped Dickman, his then housemate, with this information. The complaint also alleges that Dickman and Johnson entered into a profit sharing agreement which resulted in Dickman purchasing 20,000 shares of Tech Data common stock one day before the public announcement of the Tech Data - GE Capital contract. The complaint further alleges that a day after the announcement of the Tech Data - GE Capital contract, Dickman sold all 20,000 shares of Tech Data stock and realized an illegal profit of $105,693.44. According to the complaint, Dickman shared the profits from his illegal trades with Johnson.
For additional information, see Litigation Release No. 17347 (January 30, 2002).