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Univ. of Toledo College of Law

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Wednesday, January 2, 2008

SEC Obtains Judgment Against NBTY Inhouse Counsel On Insider Trading

On December 26, 2007, a Manhattan federal court entered final judgments against defendants Mitchell S. Drucker and Ronald Drucker, and relief defendant William Minerva. The judgments follow the jury verdict on December 3, 2007 in favor of the SEC finding the defendants liable for insider trading in the stock of NBTY, Inc. Mitchell Drucker is the former associate general counsel of NBTY, Inc., a nutritional supplements manufacturer and retailer, and his father, Ronald Drucker, is a former New York City police detective. The Commission had charged that, while Mitchell Drucker was a lawyer at NBTY, and had learned that NBTY was about to announce lower than expected quarterly earnings, he and his father sold their holdings of NBTY stock just before the negative announcement. Collectively, the defendants avoided $197,243 in losses by selling in advance of the announcement.

In making findings for the judgments, Judge Colleen McMahon issued on December 20, 2007, her Decision On Relief, in which she found that Mitchell Drucker "perjured himself during the trial." That same decision stated, among other things, that the Court is "convinced, by the brazenness of his misconduct and by his cocky refusal to own up to it, that this attorney [Mitchell Drucker] — who was supposed to be NBTY's 'policeman,' and who demonstrated utter indifference to both the law and to his client — is not fit to participate in the governance of any public company

http://lawprofessors.typepad.com/securities/2008/01/sec-obtains-jud.html

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