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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18175 / June 5, 2003

Securities and Exchange Commission v. John Freeman, James Cooper, Benton Erskine, Anthony Seminara, Norman Lehrman, Linda Karlsen, Timothy Siemers, Norman Grossman, Lawrence Schwartz, Michael Akva, Robert Fricker, Richard Zelman, Bradley Burke, Benjamin Cooper, Chad L. Conner, Deon Benson, Gordon K. Allen, Jr., Jon Geibel, and William H. Borders II, 00 Civ. 1963 (VM) (Southern District of New York)

SEC SETTLES CLAIM INVOLVING INSIDER TRADING AND BARS A BROKER FROM THE INDUSTRY

The Securities and Exchange Commission ("Commission") today announced that the Honorable Victor Marrero of the United States District Court for the Southern District of New York entered Final Judgments of permanent injunction and other relief against defendant Jon Geibel ("Geibel") of Greeneville, Kentucky on May 19, 2003. This judgment settles the Commission's claim against Geibel in a civil action filed by the Commission on March 14, 2000, alleging that from 1997 through January 2000, Geibel and others engaged in a widespread insider trading scheme that produced over $8 million in illegal profits from trading in the securities of twenty-three public companies.

The Commission's Complaint alleges that John Freeman, a temporary word-processing employee at Goldman Sachs & Co., Inc. and later Credit Suisse First Boston, tipped James Cooper and other defendants about merger and acquisition transactions involving clients of those investment banking firms. The Complaint alleges that Cooper tipped his broker, Chad Conner, who in turn, tipped Gordon Allen. Allen tipped his business partner, Geibel, who purchased securities in advance of fourteen transactions and realized profits of $632,422. Geibel provided tips to a friend who traded and realized profits of $140,898. During the relevant period, Geibel was a registered representative of a broker-dealer.

Without admitting or denying the allegations in the Complaint, Geibel consented to the entry of a Final Judgment that permanently enjoins him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder, which are antifraud provisions. Geibel was ordered to pay disgorgement in the amount of $773,320 with prejudgment interest in the amount of $197,082, but payment of disgorgement and prejudgment interest was waived based upon his sworn Statement of Financial Condition, and a civil penalty was not imposed for the same reason.

Geibel was found guilty after a criminal trial that was prosecuted by the United States Attorney's Office for the Southern District of New York. Geibel was sentenced on October 18, 2002 to thirty-six months incarceration, three years supervised probation, and a $2,400 special assessment. Based on the final judgments and criminal convictions, on June 5, 2003, the Commission issued an administrative order barring Geibel from association with any broker or dealer.

See also: L.R. 16469 (March 14, 2000); L.R. 17267 (December 12, 2001); L.R. 17501 (May 2, 2002); L.R. 17912 (January 2, 2003); and L.R. 18149 (May 20, 2003).


 

http://www.sec.gov/litigation/litreleases/lr18175.htm

Modified: 06/05/2003