SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17897 \ December 17, 2002
SECURITIES AND EXCHANGE COMMISSION v. JORGE EDUARDO BALLESTEROS FRANCO, et al., Civil Action No. 01 CV 3872 (JGK) (S.D.N.Y.) (filed May 8, 2001)
SEC OBTAINS FINAL JUDGMENT AGAINST
JUAN PABLO BALLESTEROS GUTIERREZ FOR INSIDER TRADING
On December 9, 2002, the U.S. District Court for the Southern District of New York entered a final judgment against Juan Pablo Ballesteros Gutierrez ("Juan Pablo Ballesteros") based upon charges of insider trading. The Commission's Complaint, filed on May 8, 2001, alleges that Juan Pablo Ballesteros was tipped by Jose Luis Ballesteros, his father and a director of Nalco Chemical Company ("Nalco") who has since died. The Complaint alleges that Jose Luis Ballesteros told his sons that Nalco was going to be acquired, and that Juan Pablo Ballesteros then purchased Nalco stock, making illegal profits of $106,403.75.
The Commission's Complaint specifically alleges that on June 25, 1999, Juan Pablo Ballesteros purchased 12,500 Nalco shares at a price of $44.4877 per share, through an account in the name of Casford Limited, an entity he controlled. On June 28, 1999, Nalco and Suez Lyonnaise des Eaux, S.A., ("Suez") jointly announced that they had signed a definitive merger agreement, calling for Suez to pay $53.00 per Nalco share. The Complaint alleges that on November 15, 1999, Juan Pablo Ballesteros tendered the Nalco shares in his Casford account and realized profits of $106,403.75.
Without admitting or denying the allegations of the Commission's Complaint, Juan Pablo Ballesteros consented to the entry of the Court's final judgment. The judgment orders Juan Pablo Ballesteros to pay a penalty of $106,403.75. His profits of $106,403.75, along with prejudgment interest, were previously paid as part of a settlement with other parties announced on May 8, 2001. SEC v. Jorge Eduardo Ballesteros Franco, et al., Civil Action No. 01 CV 3872 (JGK) (S.D.N.Y.) (filed May 8, 2001); SEC Press Release No. 2001-43 (May 8, 2001). In addition, the judgment permanently enjoins Juan Pablo Ballesteros from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-3 thereunder. Because Casford Limited no longer exists, the Commission dismissed its claims against that entity.
On February 27, 2002, Juan Pablo Ballesteros was convicted of insider trading in the Southern District of New York and, on June 4, 2002, was sentenced to 15 months imprisonment, a $40,000 fine and two years of supervised release arising out of the same conduct alleged in the Commission's Complaint.
All told, the Commission has now obtained over $8 million in settlements with those persons and entities charged with insider trading in Nalco stock. In addition to the Commission's May 8, 2001 Complaint, the Commission filed two additional actions arising out of trading in the securities of Nalco. SEC v. Pablo Escandon Cusi and Lori Ltd., Civil Action No. 02 CV 0971 (S.D.N.Y.) (filed February 7, 2002), Litigation Release No. 17356 (February 7, 2002); and SEC v. Hugo Salvador Villa Manzo and Multinvestments, Inc., Civil Action No. 02 CV 1766 (S.D.N.Y.) (filed March 6, 2002), Litigation Release No. 17395 (March 6, 2002). With the exception of Jorge Eduardo Ballesteros Franco (and the entities through which he traded), the Commission has reached settlements with all of the defendants named in those three actions.
The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York, the U.S. Customs Service, the Swiss Federal Office of Justice, the New York Stock Exchange and the Isle of Jersey Financial Services Commission.