The U.S. Securities and Exchange Commission settled an insider trading case against four individuals, including the former vice president of real estate at Dick's Sporting Goods Inc., related to DSG's acquisition of Galyan's Trading Company in 2004.
Last October, the SEC accused seven individuals of using confidential information about Dick's Sporting Goods' plans to buy Galyan's Trading Company in 2004. According to the SEC lawsuit, DSG's former vice president of real estate, Joseph Queri Jr., tipped off a friend about the impending purchase of Galyan's.
The lawsuit said the men purchased the stock at $11.10 per share in June 2004. After the acquisition was announced a week later, the stock was worth $16.68 per share. According to the SEC, the seven made a combined profit of $274,614.76.
Without admitting or denying the allegations in the complaint, Joseph A. Federico, Philip J. Sima, Mark J. Costello and Franko J. Marretti III. consented to the entry of a Final Judgment in which they are permanently enjoined from future violations of the antifraud provisions of the securities laws, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder.
Federico also agreed to pay disgorgement of $23,326.00, plus prejudgment interest of $7,540.22, and a one-time civil penalty for trading in the amount of $23,326.00. Simao agreed to pay disgorgement of $13,390.00, plus prejudgment interest of $4,328.37, and a one-time civil penalty for his trading in the amount of $13,390.00. Costello agreed to pay disgorgement of $9,540.00, plus prejudgment interest of $3,083.85, and a one-time civil penalty for his trading in the amount of $9,540.00. Finally, Marretti agreed to pay disgorgement of $9,552.00, plus prejudgment interest of $3,150.92, and a civil penalty for trading and tipping a colleague in the amount of $54,817.00.
The Commission has now obtained settlements from nine of the sixteen defendants involved in the case.
