Two former AT&T employees settle SEC insider trading case
NEW YORK (AP) _ Two former AT&T Corp. employees have agreed to pay $273,000 in fines and ill-gotten gains to settle civil charges they used inside information to profit from the company’s pending acquisition targets.
William Mylett, deputy to the former AT&T vice president authorities say masterminded the scam, agreed to pay $68,000 to settle the charges. Thomas Alger, a former AT&T labor negotiator, agreed to pay $204,850.
Neither admitted nor denied wrongdoing and agreed not to violate securities laws again.
The settlement brings to seven the number of defendants to settle the civil charges brought by the Securities and Exchange Commission in the $2.7 million insider-trading scam, Rory Flynn, a lawyer for the agency, said Tuesday.
The SEC still has cases pending against 10 people from the scheme and expects about five to go to trial, Flynn said.
Under the settlement entered in U.S. District Court in New York City, Mylett was required to return $369,434 in ill-gotten profits and interest. He was found financially unable to pay the full amount. Mylett had pleaded guilty earlier to related criminal charges and was sentenced to five months in prison and five months of home detention.
Alger agreed to surrender $76,744 in ill-gotten profits and pay a $76,744 fine, plus $51,361 in interest. Alger also had previously pleaded guilty to a related criminal charge and was sentenced to probation and fined $1,000.
The SEC alleged that Mylett and Alger received non-public information about pending acquisitions from Charles Brumfield, AT&T’s former vice president for labor relations, between December 1988 and Spring 1991.
The two traded on the information and made payoffs on the profits to Brumfield, the SEC alleged. The acquisition targets included Paradyne Corp., NCR Corp., Digital Microwave Corp. and Teradata Corp.
Brumfield, who was one of 17 individuals sued by the SEC in the case, agreed to pay more than $813,000 to settle. He also had pleaded guilty to related criminal charges and was sentenced to probation and fined $6,000.
Of the nine individuals charged criminally, eight pleaded guilty and one was convicted after a trial.