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Friday, June 20, 2008

Former Williams-Sonoma Manager Settles Insider Trading Charges

The SEC settled insider trading charges against Adrian P. Di Vita, a former manager at Williams-Sonoma, Inc. In its complaint, the SEC alleged that, by attending certain meetings with senior management and otherwise, Di Vita received material nonpublic information that enabled him to know that Williams-Sonoma would lower its earnings guidance for fiscal year 2006 and the third quarter of that year when the company issued a scheduled earnings press release on August 24, 2006. With that information, and prior to the issuance of the press release, Di Vita sold all 707 of his Williams-Sonoma Stock Fund units and additionally purchased 1,000 put option contracts on Williams-Sonoma stock. After Williams-Sonoma issued its August 24 press release, the company's stock price fell by more than eight percent, and Di Vita sold his put options. As a result of his trading in the stock fund units and the put options, Di Vita avoided losses and had profits totaling $67,690.

Without admitting or denying the allegations in the Commission's complaint, Di Vita has offered to settle the action. Di Vita has consented to the entry of a final judgment permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5; ordering him to pay $76,932.80 in disgorgement of ill-gotten gains and losses avoided plus prejudgment interest; and ordering him to pay a civil penalty of $67,690.

http://lawprofessors.typepad.com/securities/2008/06/former-williams.html

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