Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Tuesday, June 19, 2007

SEC Charges Wife with Trading In Information Obtained from Husband

We've seen a number of insider trading cases involving married couples, and here's another one:

On June 18, the SEC filed a settled  civil  action  in  federal district court against Terese Dearmin (Dearmin) and her father Richard Harris (Harris), alleging violations of  federal  securities  laws  in   separate instances of insider trading in the securities of U.S. Home & Garden, Inc. (USHG) ahead of the public  announcement  of  its  merger with Ionatron, Inc. (Ionatron).  The Commission's complaint  alleges  that  Dearmin  learned  from  her husband, the former CEO of a privately-held company  called  Ionatron, that it would merge with USHG approximately one  month  prior  to  the Feb. 25, 2004, public  announcement  of  the  merger.  Dearmin  tipped Harris, her  mother,  and  her  business  partner,  according  to  the complaint, and all three purchased USGH stock in advance of the merger    announcement.  Without admitting or denying the allegations in the complaint, Dearmin and Harris consented to entry of a final  judgment  that  imposes  an  injunction, disgorgement of profits, and penalties.
   

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