(Adds details, no comment from Goldman Sachs.)
DOW JONES NEWSWIRES
The Securities and Exchange Commission accused 11 people of
insider trading before two different takeover announcements,
including last year's purchase by Liberty Mutual Insurance Co. of
Safeco.
Five people, including a former investment banker at Goldman
Sachs Group, (GS), were accused of illegally tipping or trading on
confidential information before that $6.2 billion deal was
announced. Six others were accused of similar actions before an
announcement in 2005 that private-equity firm Odyssey Investment
Partners LLC would acquire Neff Corp., a Miami-based
rental-equipment company.
Three people accused in the Safeco case have settled with the
SEC and agreed to pay penalties or repay their ill-gotten
gains.
In the Safeco case, the agency said in a federal court complaint
in Florida that Anthony Perez of Maitland, Fla., illegally tipped
his brother, Ian C. Perez of Orlando, with information he obtained
through his job as a junior analyst in Goldman's investment banking
division in New York; he was terminated last year. Ian Perez then
bought Safeco call options one day before the public announcement
and later sold them for a profit of more than $152,000.
The Perez brothers agreed to settle the SEC's charges without
admitting or denying the allegations. Anthony Perez will pay a
$25,000 penalty and Ian Perez agreed to pay a total of $152,992 in
ill-gotten gains and prejudgment interest. Goldman declined
comment.
In a complaint filed in federal court in Washington, the SEC
said Math J. Hipp of Seattle engaged in insider trading based on
information he got from his wife, an executive assistant at Safeco.
Hipp bought Safeco call options six days before the public
announcement and later sold them for a profit of more than
$118,000. Hipp has agreed to pay a total of $239,770 to settle the
SEC's charges without admitting or denying the allegations.
Also accused in the Safeco case were Peter E. Talbot of
Springfield, Mass., then a financial analyst at a unit of Hartford
Financial Services Group Inc. (HIG), who allegedly tipped a nephew
that Safeco was an acquisition target. Both men were accused of
buying Safeco call options during the six days before the public
announcement and selling them afterward for a profit of more than
$615,000.
In the Neff case, the SEC accused Thomas L. Borell, a
Miami-based lawyer, of getting information through his close
friendship with a Neff director who was the brother of Neff's chief
executive. Borell allegedly bought more than $1.3 million of Neff
stock during the six weeks before the acquisition announcement and
later sold it for a profit of nearly $1 million.
Others accused in the Neff case were Dr. Sebastian De La Maza of
Miami, who made a profit of $84,000; Alberto J. Perez of Miami, who
along with his brother Jose G. Perez of Miami, made nearly
$400,000; and lawyer and accountant Kevan D. Acord of Overland
Park, Kan., who along with another accountant, Philip C. Growney of
Kansas City earned $146,572 and $13,000, respectively.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com
