Securities Law Prof Blog

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

Wednesday, October 6, 2010

SEC Charges Former Dell Employee with Insider Trading Involving Perot Tender Offer

On October 5, 2010, the SEC charged former Dell Inc. employee Marleen Jantzen and her husband, John Jantzen, a licensed broker, with insider trading around the public announcement of Dell's tender offer for Perot Systems in September 2009.

According to the SEC's complaint, Marleen Jantzen learned about the deal during the course of her duties for Dell and was under explicit, written instructions not to trade. Nevertheless, on the last trading day before the deal announcement, Marleen Jantzen made a highly unusual cash transfer to a brokerage account held jointly by both Jantzens. According to the Complaint, within minutes of the cash transfer, John Jantzen started buying Perot Systems call options and common stock in the joint account-in total, purchasing 500 shares of Perot Systems common stock and 24 Perot Systems call option contracts.

According to the Complaint, the public announcement of the deal on September 21, 2009 resulted in a substantial increase in the price of Perot System shares. Immediately following the announcement, the Jantzens liquidated their entire position in Perot Systems stock and call options. The complaint alleges that, as a result of their illegal trading in Perot Systems securities, Defendants realized net trading profits totaling $26,813.58.

This is the second case filed by the SEC charging insider trading ahead of the Dell-Perot Systems deal announcement. The Commission previously filed an emergency action against former Perot Systems employee Reza Saleh for his insider trading ahead of the transaction, and successfully recovered $8.6 million in illicit profits.

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