UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17549 / June 10, 2002
Securities and Exchange Commission v. John Wesley Straub, Jane M. Straub, and Anthony J. Campisi, 1:02CV01128 (EGS) (D.D.C.) (June 10, 2002)
SEC CHARGES THREE WITH INSIDER TRADING
The Securities and Exchange Commission today filed an injunctive action in the United States District Court for the District of Columbia, alleging that Jane M. Straub, a former employee of BetzDearborn Inc., John Wesley ("Wes") Straub, her husband, and Anthony J. Campisi, engaged in illegal insider trading in advance of the July 30, 1998, public announcement that BetzDearborn Inc. and Hercules Inc. had agreed to merge.
The complaint alleges that Jane Straub, an executive assistant at BetzDearborn, learned of the impending merger around July 27, 1998, at which time she tipped her husband, Wes Straub. On July 28, Wes Straub purchased 500 shares of BetzDearborn for a total cost of $17,163. On July 30, 1998, BetzDearborn and Hercules announced that they agreed to merge and that Hercules would pay $72 per share for all outstanding BetzDearborn shares. After the announcement, BetzDearborn common stock increased from the prior day's closing stock price of $35.88 to $69.25 per share, and closed for the day at $67.69. On October 15, 1998, the date the merger closed, Wes Straub exchanged his 500 shares for $72 per share and received an unlawful profit of $18,838.
The complaint further alleges that Wes Straub tipped his long-time accountant, Anthony Campisi, concerning the merger. Campisi purchased 500 BetzDearborn shares at a total cost of $17,875 on July 29, 1998 -- the day before the merger announcement. On July 31, after the merger announcement, and after receiving a telephone call from Wes Straub, Campisi sold all his BetzDearborn shares for $67.875 per share, and made an unlawful profit of $16,063.
The Commission alleges that as a result of the conduct described above, Wes Straub, Jane Straub, and Anthony Campisi violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In its action, the Commission is seeking permanent injunctions, disgorgement of the illegal trading profits, prejudgment interest, and civil penalties.
Jane Straub, age 57, and Wes Straub, age 59, reside in Churchville, Pennsylvania. Anthony Campisi, age 51, resides in West Collingswood, New Jersey.
Without admitting or denying the facts alleged in the complaint, the defendants have agreed to settlements under which they have consented to entry of final judgments permanently enjoining them from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and ordering them to make the following payments: (1) Jane Straub to pay a penalty of $18,838; (2) Wes Straub to pay $18,838 disgorgement of his illegal profits, prejudgment interest, and civil penalties of $34,901; and (3) Anthony Campisi to pay $16,063 disgorgement of his illegal profits, prejudgment interest, and civil penalties of $16,063. The settlements have been filed with the court for court approval.
The Commission acknowledges the assistance provided by the Pacific Stock Exchange in the investigation of this matter. This is the Commission's fifth insider trading case concerning trading before the merger of BetzDearborn and Hercules. See SEC v. Rodolfo Luzardo, et al., 01 Civ. 9206 (DC) (S.D.N.Y.) (filed October 18, 2001) (Litigation Release Nos. 17197 and 17486); SEC v. Joseph F. Doody IV, et al., 01 Civ. 9879 (JK) (S.D.N.Y.) (filed November 8, 2001) (Litigation Release No. 17225); SEC v. Bugenhagen, et al., 01 Civ. 6538 (E.D.PA.) (filed December 18, 2001) (Litigation Release No. 17278); and SEC v. Litvinsky, et al., 02 Civ. 0312 (LMM) (S.D.N.Y.) (filed January 14, 2002) (Litigation Release No. 17306).