Securities Law Prof Blog

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

Thursday, August 27, 2009

Three Defendants Settle SEC Charges Involving Insider Trading in ISE Merger

The SEC announced that it filed an amended complaint in its pending insider trading case originally filed on March 13, 2008, against John F. Marshall, the former Vice Chairman of International Securities Exchange Holdings, Inc. ("ISE"), Alan L. Tucker and Mark R. Larson. The original complaint alleged that Marshall tipped his business partners, Tucker and Larson, concerning ISE's merger talks with Eurex Frankfurt AG ("Eurex"), a German company, and that both men traded on the information ahead of the April 30, 2007 announcement of Eurex's $2.8 billion cash merger agreement with ISE, for illegal profits totaling approximately $1.1 million and $31,000, respectively. This amended complaint adds a new defendant, Thomas Genzale, and charges him with having also traded in ISE securities in advance of the April 30, 2007 acquisition announcement based on tips from defendant Marshall, resulting, in Genzale's case, in profits of approximately $826,000. Genzale, Marshall, and Tucker have all agreed to settle the Commission's charges set forth in the Complaint without admitting or denying those allegations.

Recently, on the Commission's motion, the Court dismissed the Commission's charges against defendant Larson with prejudice. In place of the original complaint's allegation that Marshall tipped Larson, the First Amended Complaint alleges that Marshall recommended the purchase of ISE securities to a business partner, who, in turn, purchased 1,700 shares of ISE, resulting in profits of approximately $31,000.

Genzale has consented to pay $826,118.84 in disgorgement, $105,977.61 in prejudgment interest, and an $826,118.74 penalty. Marshall has consented to pay $31,452.73 in disgorgement (the alleged amount of the trading profits of the business partner to whom he recommended ISE), and $4,034.88 in prejudgment interest-and has also consented to be permanently barred from serving as an officer or director of a publicly-traded company. Finally, Tucker has consented to pay $18,342.06 in prejudgment interest.

SEC Action | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Three Defendants Settle SEC Charges Involving Insider Trading in ISE Merger :


Post a comment