SEC Charges Woman, Two Relatives in Insider Trading Scheme
WASHINGTON (AP) _ A woman was charged Monday with giving inside information to relatives who allegedly made more than $400,000 in illegal profits on the merger of a Dow Chemical Co. affiliate with her employer, Marion Laboratories.
Barbara Aldrige was charged with illegally passing confidential corporate information, while two relatives by marriage were charged with making $415,000 in illegal trading profits.
The charges were contained in a civil complaint filed by the Securities and Exchange Commission at federal court in Kansas City, Mo.
Ms. Aldrige, of Kansas City, Mo., who was not accused of insider trading, settled the charges without admitting or denying wrongdoing and agreed to pay a $10,000 penalty, the SEC said.
Also charged in the civil action were Michael Trikilis, a Hollywood producer living in Beverly Hills, Calif. and Thomas LaChapelle, of Woodland Hills, Calif., a sales manager for a data processing company.
The SEC is seeking $400,000 in restitution plus unspecified fines from Trikilis and $15,000 plus fines from LaChapelle. Neither has settled with the SEC, said Harry Weiss, an associate director of the SEC’s Enforcement Division.
″Mr. Trikilis has done absolutely nothing wrong, and intends to defend against this action and to be vindicated in court,″ said Trikilis’ lawyer in Los Angeles, Michael Donahue. He said his client cooperated fully with the SEC. LaChapelle was not immediately reachable for comment.
According to the complaint, Ms. Aldrige, who worked in Marion’s audio- visual department, was asked to help make a video tape explaining the deal between Dow and Marion to Marion employees.
Although told not to divulge the information, Ms. Aldrige called her aunt in California on July 12, 1989, and recommended she buy Marion stock, the SEC contended.
The aunt, LaVerne Hunt, in turn told her two sons-in-law - Trikilis and LaChapelle - who bought Marion securities over the next two days.
When the deal was announced on July 17, 1989, the pair sold their securities, allegedly reaping the $415,000 profit, the SEC said.
Trikilis later paid his mother-in-law, who did no trading herself, $5,000. Weiss said Mrs. Hunt was not charged with wrongdoing but the SEC official declined further comment on the woman’s status.
Federal securities law forbids trading by corporate officers, directors, merger lawyers and other insiders with confidential information that could affect the stock market if that information became public. They are also barred from telling others who might trade before the news is disclosed to the investing public.