Wachovia Broker Found Liable for Insider Trading in Blue Rhino

On Nov. 26, 2007, the federal district court for the Northern District of Illinois entered  a  permanent injunction and other relief against Mark Michel, a registered representative with Wachovia  Securities, finding that he repeatedly traded  on  material,  non-public  information  in  the securities  of Blue Rhino Corp. (Blue Rhino) in the week leading up to Blue  Rhino's  Feb.  9,  2004,  merger announcement  with  Ferrellgas Partners, LP.  The Court found that a long-time friend of Michel's  (who  was  a  co-defendant  in  the  case who had previously settled)  tipped  Michel  about  Blue Rhino's merger negotiations in a telephone call. The Court found that the following  morning,   Michel began a six-day buying spree for himself, his relatives  and  his  customers in which he bought $1.4 million of Blue Rhino stock. The opinion also found that several other individuals had received the same  information  as  Michel  on  the  night of January 29 or shortly thereafter,  all  of  whom  were  friends  or  relatives of a business partner of one of Blue Rhino's directors, and all made unusually large and unexplained purchases of Blue Rhino in the week before the merger.  The  judge  found  that  based  on  the  close relationships among the individuals  involved,  a series of unusual telephone calls on January 29  and  30, the unusually large purchases of Blue Rhino that followed almost   immediately,   and   numerous   "shifting,  contradictory and implausible  or  inadequate explanations" of the purchases, Michel and the other individuals had engaged in insider trading.