AP NEWS
Related topics

New Civil Charges Filed in Business Week Insider Trading Scandal

January 9, 1990

NEW YORK (AP) _ The Securities and Exchange Commission on Tuesday accused two California men of illegally trading on confidential information from advance copies of Business Week magazine.

The defendants are William N. Jackson, of Long Beach, Calif., a former employee of a Business Week printer, and Brian J. Callahan, of Anaheim, Calif., a former broker in the Anaheim office of Prudential-Bache Securities Inc.

The civil complaint, filed in federal court in Los Angeles, seeks $39,000 in alleged profits from the two men and fines triple the profit of $117,000.

The SEC, in a news release from its New York office, said the case was the fifth civil action - three of which have been settled - alleging trading on information in advance copies of Business Week. Criminal charges also were filed in some of the earlier cases.

According to the complaint, Jackson had access to advance copies of the magazine through his job at R.R. Donnelley & Sons Co., which printed Business Week at a plant in Torrance, Calif.

Jackson allegedly traded on 49 companies mentioned in the magazine’s ″Inside Wall Street″ column between July 1987 and July 1988 and shared the information with his brothers, the SEC said. Jackson and his brothers allegedly made $19,506 in profits.

The complaint said Callahan approached Jackson about opening an account at Prudential-Bache in April 1988, after learning that Jackson had advance information from Business Week.

The SEC said Jackson told Callahan the names of companies mentioned in upcoming issues of the magazine. Callahan allegedly purchased securities of seven companies, earning a profit for himself of $1,148 between April 1988 and July 1988.

The complaint said he also used the information to place orders for his customers, who profited by at least $18,535. The SEC alleged Callahan benefited by his customers’ trading because he earned commissions.

The case is not the first involving employees of R.R. Donnelley. In August, a former salesman at the company’s Torrance plant, Shayne A. Walters, pleaded guilty to criminal charges and settled SEC civil charges that he traded on advance copies of Business Week. Walters awaits sentencing.

Also, William Dillon, a former broker for Merrill Lynch & Co., was sentenced to six months in prison for similar charges. The government charged that he paid various employees at an R.R. Donnelley plant in Connecticut for advance copies of the magazine.

AP RADIO
Update hourly