SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19539 / January 23, 2006
SECURITIES AND EXCHANGE COMMISSION v. ERNESTO SIBAL, ET AL., Civil Action No. CV 05-3133 GPS (AJWx) (C.D. CA)(filed April 28, 2005)
FORMER FINANCIAL ANALYST BARRED FROM SECURITIES INDUSTRY
On January 11, 2006, the U.S. District Court for the Central District of California entered a settled final judgment against Robert Y. Joo (“Joo”), a former financial analyst, based upon charges of insider trading. In its complaint, filed on April 28, 2005, the Commission alleged that, during 2002 and 2003, Joo and Doseph J. Shin (“Shin”), a co-defendant, misappropriated material nonpublic information from the investment banks where they worked and tipped co-defendants Ernesto V. Sibal (“Sibal”), Chae Hyon Chin (“Chin”), Benjamin Y. Chiu (“Chiu”) and Pejman Sabet (“Sabet”) in advance of one or more of four separate merger transactions. The defendants used the misappropriated information to trade in the securities of one or more of the following companies: NCS Healthcare, Inc., The DeWolfe Companies, Inc., Prime Retail, Inc. and Airborne, Inc. The complaint alleged that during the course of these insider trading schemes, the individuals who executed the trades shared certain of their illegal profits with, or paid kickbacks to, Shin and/or Joo. The Commission alleged that defendants, collectively, made in excess of $970,000 in illegal profits from these trading schemes. Judgment was entered against Shin, Sibal, Chin and Chiu on July 22, 2005.
Joo also pled guilty in a criminal proceeding filed by the United States Attorney’s office for the Central District of California to conspiring to commit securities fraud and wire fraud, and conspiring to obstruct SEC proceedings. He was sentenced on January 6, 2006 to three years probation and one year of home confinement.
Without admitting or denying the allegations in the Commission’s complaint, Joo consented to the entry of the final judgment, which permanently enjoins him from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 promulgated thereunder and holds him jointly and severally liable for $969,894.10 in disgorgement, but reduces that liability by the amount of disgorgement and prejudgment interest already paid by Sibal, Shin, Chin, Chiu and Sabet. The judgment further waives Joo’s remaining liability of $42,992.68, representing $38,607 in disgorgement and $4,385.68 in prejudgment interest based on sworn representations in Joo’s Statement of Financial Condition and other documents and information submitted to the Commission.
Today, based on the entry of the Court’s injunction, the Commission instituted settled administrative proceedings against Joo. Without admitting or denying the Commission’s findings, Joo consented to the entry of a Commission order barring him from associating with any broker, dealer, or investment adviser. In the Matter of Robert Y. Joo, Administrative Proceeding File No. 3-12157, Securities Exchange Act of 1934 Rel. No. 53169 (January 23, 2006). See also Litigation Release Nos. 19210 (April 28, 2005) and 19328 (August 8, 2005).
The Commission’s investigation is continuing.