Thursday, October 1, 2009
On September 21, 2009, the United States Court of Appeals for the Second Circuit affirmed a jury verdict finding Mitchell S. Drucker, an attorney and former associate general counsel at NBTY, Inc. ("NBTY"), a nutritional supplements manufacturer and retailer, and his father, Ronald Drucker, liable for violating the antifraud provisions of the federal securities and affirmed the remedies imposed by the federal district court. The Court of Appeals also affirmed the District Court's order of disgorgement against relief defendant William Minerva ("Minerva").
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, a former New York City police detective, sold their entire holdings of NBTY stock just before the negative announcement. Collectively, the defendants avoided $197,243 in losses by selling in advance of the announcement. On December 3, 2007, a federal jury in the United States District Court for the Southern District of New York found Mitchell Drucker and Ronald Drucker violated the antifraud provisions of the federal securities laws by committing insider trading.