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U.S. Securities and Exchange Commission


Litigation Release No. 18496 / December 9, 2003


On December 4, 2003, the Securities and Exchange Commission filed a complaint in the United States District Court for the Northern District of Texas alleging illegal insider trading by Richard Wilson, 74, of Grapevine, Texas. The Commission's complaint alleges that on February 12, 2001 and March 6, 2001, Wilson violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, when he bought a total of 1,500 shares of common stock in H.D. Vest, Inc. (H.D. Vest) while in possession of material, nonpublic information concerning an upcoming merger between H.D. Vest and Wells Fargo & Co. (Wells Fargo). Wilson obtained this information by reading a confidential document that he found in his daughter and son-in-law's home. Wilson's son-in-law was an H.D. Vest insider who had knowledge about the upcoming Wells Fargo merger.

Wilson, without admitting or denying the Commission's allegations, has consented to the relief sought in the Commission's complaint. In his consent, Wilson agreed to disgorge $21,132.50 in illegal profits plus $3,148.92 in prejudgment interest, and to pay a civil penalty of $26,415.63, an amount equal to 1.25 times his illegal profits. The Commission intends to have these funds paid into a court account pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002 for ultimate distribution to victims of the fraud. In addition, the judgment permanently enjoins Wilson from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

Specifically, the Commission's Complaint alleges:

  • In or about October 2000, Wilson's son-in-law joined a team of H.D. Vest employees making presentations about the business of H.D. Vest to approximately five companies, including Wells Fargo, that were considering a strategic alliance with, or a takeover of, H.D. Vest.
  • In late December 2000 or early January 2001, while Wilson was alone in his son-in-law's house, he found a non-public document Wilson's son-in-law used in his presentations to suitor companies while Wilson was searching for paper supplies in the pantry. The purpose of the document - and the purpose Wilson gleaned from it - was to describe H.D. Vest to a large prospective investor or suitor.
  • On February 12, 2001 and March 6, 2001, while aware of material non-public information concerning Wells Fargo's impending acquisition of H.D. Vest, Wilson purchased 1,000 and 500 shares of H.D. Vest common stock for $6.25 and $6.375 per share, respectively. At the time he purchased these 1,500 shares of H.D. Vest common stock, Wilson knew or recklessly disregarded the fact that information about Wells Fargo's impending acquisition of H.D. Vest was non-public and that he had used that information in breach of his duty of confidentiality and trust to his son-in-law.
  • On March 23, 2001, after the news of Wells Fargo's acquisition of H.D. Vest was made public in a joint press release by Wells Fargo and H.D. Vest, the price of H.D. Vest's common stock closed at $20.38, up $13.38 per share from the previous trading day. Wilson earned illegal profits of $21,132.50.

SEC Complaint in this matter


Modified: 12/10/2003