SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17712 / September 5, 2002
SECURITIES AND EXCHANGE COMMISSION v. RONALD K. MAHABIR, et al.,
Civil Action No. 02 CV 1809 (BSJ) (S.D.N.Y.) (filed March 7, 2002)
Court Orders Insider Traders to Pay Over $1.1 Million in Penalties and Disgorgement
On August 27, 2002, the U.S. District Court for the Southern District of New York entered a final judgment by default against John James Panagotacos and his father James John Panagotacos (collectively, "the Panagotacoses"), for insider trading. The Court deemed the Panagotacoses to have admitted the allegations in the Commission's Complaint. The Complaint alleged that John Panagotacos was tipped in advance of three public announcements by his friend and former college roommate, who was an analyst at Morgan Stanley & Company. John Panagotacos then tipped his father, James Panagotacos, and the pair traded in advance of announcements: (1) on August 25, 1997 that Perkin-Elmer Corporation would buy PerSeptive Biosystems, Inc.; (2) on August 29, 1997 that NationsBank Corporation would acquire Barnett Banks, Inc.; and (3) on September 15, 1997 that Equity Office Properties Trust would acquire Beacon Properties Corporation. By their fraudulent conduct, the Panagotacoses made illegal profits of over $150,000.
The Court ordered John Panagotacos to pay disgorgement in the amount of $54,443.75, plus prejudment interest in the amount of $79,511.66, and James Panagotacos to pay disgorgement in the amount of $103,300, plus prejudgment interest in the amount of $151,357.39. The Court also ordered John Panagotacos to pay a civil penalty of $473,231.25, which represents three times his profits and those of his tippee-father, and James Panagotacos to pay a civil penalty of $309,900, which represents three times his profits. Finally, the Court's order permanently enjoins the Panagotacoses from violating the antifraud provisions contained within Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
See also, In the Matter of Ronald K. Mahabir, Administrative Proceeding File No. 3-10837; Securities Exchange Act of 1934 Release No. 46217 (July 17, 2002); and Litigation Release No. 17401 (March 7, 2002).