U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18416 / October 17, 2003
Securities and Exchange Commission v. Devin A. Danehy (U.S.D.C. W.D. Kentucky, Civil Action No. 3:01CV555, filed September 21, 2001)
FORMER TRICON GLOBAL RESTAURANT, INC. MANAGER CRIMINALLY INDICTED FOR INSIDER TRADING
The Commission announced that on October 6, 2003, Devin Danehy ("Danehy"), of Orlando, Florida, was criminally indicted by the United States Attorney for the Western District of Kentucky on insider trading charges. Danehy is scheduled to be arraigned on October 20, 2003.
According to the indictment, Danehy was employed as a manager in the Business Analysis Group by Tricon Global Restaurant, Inc., now known as Yum! Brands, Inc. ("Tricon"), which is a publicly-traded company located in Louisville, Kentucky. The indictment alleges that from July 1998 through February 1999, Danehy received confidential non-public information concerning Tricon's projected financial results for the third and fourth quarter of 1998 and first quarter of 1999. The indictment further alleges that he then used that information to trade in the call options of Tricon for his own profit during this same time period. The indictment charges Danehy with six counts of securities fraud in connection with his insider trading activities. If convicted of all criminal charges, Danehy faces up to 30 years imprisonment, a fine of up to $1.5 million, and three years supervised release.
On September 21, 2001, the Commission filed a civil fraud case in the United States District Court for the Western District of Kentucky charging Danehy with insider trading based primarily on the conduct described above. According to the Commission's complaint, Danehy violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Danehy agreed to settle with the Commission by consenting, without admitting or denying the Commission's allegations, to the entry of a judgment enjoining him from future violations of the antifraud provisions of the federal securities laws, and ordering him to disgorge $110,301 plus $24,026 in prejudgment interest. A final judgment by consent against Danehy was entered by the court on September 25, 2001. For further information, see Litigation Release No. 17150 (September 26, 2001).