Opening Neighbor’s Mail Leads to Insider Trading Charges
WASHINGTON (AP) _ A Connecticut man who allegedly traded on inside information obtained when one of his tenants opened someone else’s mail agreed to pay almost $20,000 in fines and penalties, federal officials said Monday.
The misappropriated information concerned a 1988 tender offer for Stanadyne Inc. by Emhart Corp., the Securities and Exchange Commission said.
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.
Harry J. Weiss, an attorney with the SEC’s Enforcement Division, said no financial penalty was sought against Warren because he did not trade for himself.
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 the contents of a letter to Pencikowski concerning the Emhart offer.
″The complaint alleged Mr. Warren misappropriated information from the director and then tipped Mr. Pencikowski,″ Weiss said.
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.
Pencikowski’s lawyer, Vincent Dowling, was not in his office when called for comment. Warren’s lwyer, Steven Sach, declined comment until he spoke with his client.