Six More People Charged in Motel 6 Insider Trading Case
NEW YORK (AP) _ The Securities and Exchange Commission filed civil insider-trading charges against six people who allegedly made $5.6 million by trading Motel 6 stock with improperly obtained information.
The charges, filed Monday in U.S. District Court in New York, alleged that the illegal trades were made in 1990, after an executive vice president for the chain, Hugh Thrasher, told a stock trader that the company was being sold.
The charges against the six brings to 30 the number of defendents charged in the Motel 6 case _ a record for an SEC insider-trading case involving a single stock, The Wall Street Journal reported Tuesday.
Thrasher and 23 others already had been charged.
The SEC charged trader Joseph P. Greenwald with receiving confidential information about the planned 1990 takeover of Motel 6 by a French company, Accor SA, the Journal said.
Greenwald allegedly passed the information to two other traders, Jeffrey F. Green and Joseph Latona, who tipped off Michael Borlinghaus, former head of the New York investment firm Frost & Sullivan. Borlinghaus told a former business partner, Heinz Grein, who in turn told Leonard Bellezza, a neighbor of Borlinghaus.
Borlinghaus, Latona, Green and Greenwald previously pleaded guilty to related criminal charges brought by the Justice Department.
The SEC also charged Bellezza with receiving inside information about Cie. de Saint Gobain SA’s 1990 tender offer for Norton, a Worcester, Mass., producer of abrasives, chemicals and plastics, the Journal said.