Indianapolis Information Company Head Settles with SEC
WASHINGTON (AP) _ The chairman of Anacomp Inc., an Indianapolis computer services company, has settled civil charges of engaging in an alleged insider trading scheme, the Securities and Exchange Commission said Thursday.
In a civil lawsuit filed at federal court in Indianapolis, the SEC charged Louis Ferrero, Anacomp’s chairman, with illegally tipping off a friend to Anacomp’s pending acquisition of another company, Xidex Corp., in 1988 before the deal was made public.
There was no allegation that Ferrero engaged in inside trading himself.
Without admitting or denying wrongdoing, Ferrero, 47, of Atlanta, Ga., settled with the SEC and agreed to pay penalties totaling $277,750.
Insider trading charges are still pending against the friend, Michael Maio, chairman of Landmark Savings and Loan in Indianapolis, and two other people who also did not settle with the SEC.
″To fight these allegations would require a large commitment of my time and energy,″ Ferrero said in a statement issued by the company, adding ″there is complete agreement within our company that nothing should distract us from the progress we are making.″
The SEC complaint charged that Maio, who also owns an amusement park, illegally traded on the stocks of Xidex and Anacomp and passed on the confidential information to two other people who, in turn, traded on the inside information.
The SEC charged that Maio, 51, of Indianapolis, and the people he tipped, realized more than $450,000 in illegal profits from their purchase of Xidex stock while avoiding losses of more than $100,000 by selling Anacomp stock before the deal was made public.
According to the complaint, Maio was in Las Vegas at the same time his friend Ferrero was there negotiating with the president of Xidex, a Palo Alto, Calif., maker of microfilm, computer disks and data retrieval products.
The SEC alleges Ferrero told Maio about the proposed acquisition and Maio began buying Xidex stock shortly afterward, even calling his broker from a Las Vegas airport phone booth.
The complaint alleges that Maio also told two other Indianapolis residents, Patricia Ladavac, a friend and stockbroker, and Darrin Duncan, who was engaged to one of Maio’s daughters, about the pending deal.
They also are accused of trading illegally on the inside information.