Thursday, January 13, 2011
The SEC charged George H. Holley, the co-founder and former Chairman of the Board at Home Diagnostics Inc., with illegally tipping friends and business associates with inside information about an impending acquisition of the company. The SEC alleges that Holley provided his personal accountant Steven Dudas and his friend and business associate Phairot Iamnaita with confidential information about the company's upcoming acquisition by Nipro Corporation. Holley then gave Dudas $121,500, which Dudas and Iamnaita used to purchase Home Diagnostics stock in a joint brokerage account. After the acquisition was publicly announced, Dudas and Iamnaita tendered their shares for an illicit profit of approximately $90,120. Dudas and Iamnaita are charged along with Holley in the SEC's complaint filed today in federal district court in Trenton, N.J.
The SEC alleges that in addition to tipping Dudas and Iamnaita between December 2009 and Jan. 13, 2010, Holley illegally provided two other friends, a relative, and a business associate with inside information about Home Diagnostics's imminent acquisition. Holley provided at least two of these individuals with a cover story, giving them copies of analyst reports and telling them that they should use the reports to justify their illicit trading. All four of these individuals purchased Home Diagnostics stock on the basis of Holley's tips for combined profits of more than $170,000.
The Commission seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and the imposition of monetary penalties against all defendants. The SEC also seeks to permanently prohibit Holley from acting as an officer or director of a public company pursuant to Section 21(d)(2) of the Exchange Act.