Securities Law Prof Blog

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

Thursday, April 16, 2009

Former Fidelity National Director Settles Insider Trading Charges in Lending Tree

The SEC announced today that on April 10, 2009, the District Court for the Central District of California entered a final judgment against J. Thomas Talbot ("Talbot"), a former Director of Fidelity National Financial Inc. ("Fidelity"), in an insider trading case.  Without admitting or denying the allegations in the complaint, Talbot consented to the entry of the final judgment which (1) permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, (ii) orders him to pay disgorgement of $67,881 and prejudgment interest of $26,916, and (iii) orders him to pay a civil penalty of $135,762.

The Commission's complaint alleged that in April 2003, Talbot engaged in insider trading by purchasing stock of LendingTree, Inc. ("LendingTree"), after learning at a meeting of the Fidelity Board of Directors that LendingTree would be acquired by another company.  According to the SEC's Complaint, Talbot wrote "LendingTree" on the top of his meeting agenda, the only notes that Talbot made during the four-hour Board meeting. The Complaint alleged that after this information was conveyed to the Board of Directors, a Fidelity Board member cautioned the directors not to trade in LendingTree securities because they had been provided with confidential information; however, two days after the Board meeting, Talbot purchased 5,000 shares of LendingTree stock and also subsequently purchased an additional 5,000 shares of LendingTree.  The Complaint further alleged that on May 5, 2003, the day that USA Interactive announced that it would acquire LendingTree, Talbot sold his 10,000 shares of LendingTree stock, realizing illicit profits of $67,881.

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