US judge clears Pa. lobbyist of insider trading (AP)
Tue, 28 Apr 2009 21:10:41 Etc/GM
Frederick W. Anton III, president and chief executive officer of the Pennsylvania Manufacturers' Association, was cleared of a Securities and Exchange Commission complaint that he helped a former colleague and his son avoid $381,000 in losses.
Anton served as chairman of PMA Capital Corp., based in suburban Blue Bell, at the time of the Oct. 31, 2003, phone call with David L. Johnson, a retired vice president of the insurance holding company.
Johnson sold 10 percent of his 400,000 shares of PMA stock over the next few days, and advised his children to sell their stock. On Nov. 4, the company boosted its loss reserves and suspended dividends. The stock price closed at $5.03, down from an average $13.17 the day before.
Johnson avoided losses of about $325,000 and his son about $56,000.
U.S. District Judge Juan R. Sanchez, who presided over a judge-only trial last fall, said the SEC failed to prove that Anton benefited from any disclosures.
"Without a showing the tipper acted for personal gain, there can be no insider trading violation," he wrote in a 22-page ruling issued Thursday.
He also found that neither man's testimony about the phone call was credible. Johnson offered various reasons for calling Anton that day, once saying he called because he knew Halloween was one of Anton's favorite holidays.
But Sanchez also doubted the SEC theory that Anton tipped off Johnson as a "gift." Testimony suggests the two men were mere business acquaintances, not close friends. He also found that Johnson had taken earlier steps to start to diversify his stock holdings based on concerns about the company.
Johnson settled with the SEC for $786,000, which covers the losses avoided by father and son and a $381,000 penalty.
Anton declined comment on the ruling Tuesday. SEC lawyer Kingdon Kase did not immediately return a message left by The Associated Press.
source: http://biz.yahoo.com/ap/090428/us_lobbyist_insider_trading.html?.v=6