U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19106 / March 1, 2005
Securities and Exchange Commission v. John D. Hutchinson, Civil Action No. CV 05-1489 SJO (FMOx) (C.D. Cal.)
SEC SETTLES INSIDER TRADING CHARGES AGAINST DIVISIONAL PRESIDENT OF THE RYLAND GROUP
The Securities and Exchange Commission today filed a settled enforcement action in the United States District Court for the Central District of California charging John D. Hutchinson, of Coppell, Texas, with insider trading in the stock of The Ryland Group, Inc., a home building and mortgage finance company headquartered in Calabasas, California. Hutchinson, age 53, is a non-practicing attorney and is the president of Ryland's Dallas division.
The Commission's complaint alleges that during December 2003, Hutchinson, in the course of his duties as a division president of Ryland, became aware that Ryland's new housing orders for the fourth quarter of 2003 would decrease significantly compared to the fourth quarter of 2002. The complaint alleges that while Hutchinson was aware of this non-public information, he exercised all of his exercisable options in Ryland stock, and sold the underlying shares before this information was publicly announced, thereby avoiding a substantial loss of over $100,000.
To settle the charges, Hutchinson consented, without admitting or denying the allegations in the complaint, to the entry of a judgment permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Hutchinson also consented to pay disgorgement of the loss avoided in the amount of $101,778, plus $1,179.84 in prejudgment interest, and a civil penalty equal to the loss avoided in the amount of $101,778.
The Commission acknowledges the assistance of the New York Stock Exchange in the investigation of this matter.