Securities Law Prof Blog

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

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Tuesday, December 4, 2007

Broker Settles Charges He Traded in Advance of Tender Offer Announcement

The SEC announced that it settled charges against David W. Knall, a registered representative and investment adviser, for trading in advance of Dick's Sporting Goods Inc.'s June 21, 2004, announcement that it intended to acquire Galyan's Trading Company, Inc. via a tender offer. The SEC alleged that Knall, by purchasing 10,000 shares of Galyan's stock prior to the public announcerment of the tender offer was able to cover a previously established short position in his brokerage account and avoid losses.  The day after the public announcement, Galyan's stock closed at $16.68, a 50.3% increase from the previous day's closing price of $11.10.

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