U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 17697 / August 23, 2002
SECURITIES AND EXCHANGE COMMISSION v. MICHAEL MOONEY, Civil Action No. 97-cv-1185
MICHAEL MOONEY SENTENCED TO 42 MONTHS AND ORDERED TO PAY $220,000 FOR INSIDER TRADING IN UNITED HEALTHCARE OPTIONS.
On August 21, 2002, Michael Mooney was sentenced to 42 months in prison, 3 years of supervised release, and ordered to pay $150,000 in fines plus $70,000 in criminal forfeiture by the Honorable James Rosenbaum, United States District Judge for the District of Minnesota, for trading options of United Healthcare Corporation in May and June of 1995 based on material, non-public information regarding United's plan to acquire The MetraHealth Companies, Inc. Mooney, a vice-president of underwriting for United Health Care at the time he made the trades, was a member of United's due diligence team investigating the potential acquisition of MetraHealth. After the merger was announced, United's stock price rose approximately 11%. The Court found that Mooney received ill-gotten gains of $274,199 as a result of his illegal trading in United.
The S.E.C. filed a civil action against Mooney on August 2, 1999 in connection with his trading of United options in 1995, alleging that the options were sold while he was in possession of material, non public information regarding United's plan to acquire MetraHealth, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The S.E.C.'s action seeks an injunction, disgorgement of the ill-gotten gains and a civil penalty. The civil action has been stayed pending resolution of the criminal trial.