Two Men Settle SEC Inside Trading Charges
WASHINGTON (AP) _ The Securities and Exchange Commission says two Connecticut men have settled insider trading charges stemming from Emhart Corp.’s tender offer for Stanadyne Inc.
One of the two, who allegedly traded on inside information obtained when the other opened somebody else’s mail, agreed to pay almost $20,000 in fines and penalties, the SEC said Monday.
The misappropriated information concerned a 1988 tender offer for Stanadyne, a Windsor, Conn., pump and faucet maker, by Hartford-based Emhart, which makes tools and machinery.
Stanadyne was acquired by FSLI Acquisition Corp. in February 1988.
The SEC accused Thaddeus Pencikowski, 37, of Farmington, Conn., of making $9,093 in alleged illegal profits after buying 750 shares of Stanadyne common stock Jan. 8, 1988, with confidential information allegedly supplied to him by Bruce J. Warren, also 37, of Plainville, Conn.
Both men settled the civil charges without admitting or denying wrongdoing.
Pencikowski’s lawyer, Vincent Dowling, was not in his office when called for comment. Warren’s lawyer, Steven Sach, declined to comment until he spoke with his client.
″No financial penalty was sought for Mr. Warren, who did not trade for himself,″ said Harry J. Weiss, an attorney with the SEC’s Enforcement Division.
According to the SEC, Warren agreed to receive a Stanadyne director’s mail while the director was away. Warren’s computer graphics company and the director’s office were in the same building, which was owned and managed by Pencikowski.
The SEC accused Warren of violating a ″duty of trust and confidence″ to the Stanadyne director when he revealed to Pencikowski the contents of a letter concerning the Emhart offer.
″The complaint alleged Mr. Warren misappropriated information from the director and then tipped Mr. Pencikowski,″ said Weiss.
Pencikowski allegedly bought 750 Stanadyne shares at $26.50 per share on Jan. 8 and sold them for $39 a share on Jan. 11, 1988 - the day the Emhart offer was made public.
According to the SEC, Pencikowski agreed to disgorge $10,847 in alleged illegal profits plus interest as well as a penalty equal to his alleged profits of $9,093.
Both men also agreed to the entering of a court order barring them from breaking securities laws.