Securities Law Prof Blog

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

Thursday, May 31, 2007

SEC Settles Charges Involving Trading in Advance of Stolen Press Releases

The Securities and Exchange Commission announced settlement of charges against against Lohmus Haavel & Viisemann ("LHV"), an Estonian financial services company, and Oliver Peek, a former employee of LHV, who is a citizen and resident of Estonia. LHV and Peek are the remaining defendants in a fraud action filed by the Commission on November 1, 2005.  The Commission alleged in its Complaint that, from at least January 2005 until the scheme was halted by the Commission's filing of an emergency action in the District Court, the defendants conducted a fraudulent scheme involving the electronic theft and trading in advance of more than 360 confidential, non-public press releases issued by more than 200 U.S. public companies. The Commission alleged that the defendants illegally traded on confidential, non-public information fraudulently stolen from the website of Business Wire, a leading commercial disseminator of news releases and regulatory filings for companies and groups throughout the world.  Without admitting or denying the allegations in the Commission's Complaint, Peek and LHV consented to a permanent injunction; disgorgement by Peek of profits of $13,000,000, representing the illegal profits from the alleged scheme, together with a civil penalty of $1,350,000. LHV was also ordered to pay a civil penalty of $650,000.

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