Securities Law Prof Blog

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

A Member of the Law Professor Blogs Network

Wednesday, June 4, 2008

SEC Charges Two With Insider Trading in Connection with Johnson & Johnson Merger

The SEC filed a civil action in the United States District Court for the Southern District of New York against Burr B. McKeehan and Joseph A. Fontanetta for engaging in unlawful insider trading in the securities of Animas Corporation ("Animas") before a December 16, 2005 merger announcement with Johnson & Johnson. Animas designed, manufactured and sold products and services for patients with insulin-requiring diabetes. Its common stock was traded on the NASDAQ National Market System until February 2006, when the merger with Johnson & Johnson became effective.

The complaint alleges that Fontanetta, the Chief Executive Officer a privately-held medical instrumentation company, tipped material nonpublic information about Animas' merger to McKeehan, a retired podiatrist, two days prior to the merger announcement. The complaint also alleges that Fontanetta either misappropriated or unlawfully received the material nonpublic information from a fellow board member at his company who was the husband of an Animas executive and privy to the merger negotiations.  After receiving the information, the complaint alleges that McKeehan began purchasing Animas stock and purchased a total of 30,000 shares of Animas stock, and, as a result of his unlawful trading, McKeehan realized potential profits of $183,018.

Without admitting or denying the allegations of the complaint, McKeehan has consented to the entry of a final judgment, subject to the Court's approval, permanently enjoining him from violating the charged provisions, and ordering him to pay disgorgement of $183,018, plus prejudgment interest of $18,059, and a civil penalty of $183,018.

http://lawprofessors.typepad.com/securities/2008/06/sec-charges-two.html

SEC Action | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef00e552c125ff8834

Listed below are links to weblogs that reference SEC Charges Two With Insider Trading in Connection with Johnson & Johnson Merger:

Comments

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITY AND EXCHANGE COMMISSION,
Plaintiff,
v.
Joseph A. Fontanetta,
Defendant.
08 Civ. 5110 (JSR)
ECF Case

STIPULATION OF VOLUNTARY DISMISSAL
The parties stipulate and agree to the voluntary dismissal of this action pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii) as set forth below.

IT IS HEREBY STIPULATED AND AGREED that the claims of the Plaintiff Securities and Exchange Commission against Defendant Joseph A. Fontanetta pending in the above captioned matter shall hereby be dismissed with prejudice, with the parties to bear their own costs, disbursements and attorney’s fees and expenses.

IT IS SO STIPULATED.
Dated: 10/29/2009

G. Jeffrey Boujoukos (admitted pro hac vice)
Scott A. Thompson (admitted pro hac vice)
Jennifer L. Crawford (admitted pro hac vice)
Securities and Exchange Commission
701 Market Street, Suite 2000
Philadelphia, PA 19106

Attorneys for Plaintiff
Securities and Exchange Commission

Posted by: oneand | Nov 10, 2009 9:36:07 AM

Post a comment