SEC settles Hollywood insider dealing case
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Your support makes all the difference.THE US Securities and Exchange Commission has settled an insider-trading case against four businessmen who traded in the stock of MCA, the Hollywood film studio, immediately before its 1990 takeover by Matsushita Electrical Company of Japan.
The case was unusual in that it involved the son of MCA's president, Sidney Sheinberg, who overheard his father at home discussing the impending deal. Despite a warning from his father not to trade on the information, Jonathan Sheinberg passed on the share tip to three associates including his father-in-law.
The SEC estimated that the three made illicit profits of dollars 417,000 ( pounds 273,000) as MCA shares doubled on the takeover news. Together with Jonathan Sheinberg they have agreed to pay back the estimated profits plus additional penalties in a dollars 1.3m settlement that did not include any admission or denial of guilt.
Richard Ursitti, the father-in- law, agreed to pay dollars 573,475, representing dollars 260,826 in forfeiture of allegedly illegal profits, an equal amount as insider-trading penalty and dollars 51,823 in interest.
Barry Fogel, a friend of Jon Sheinberg's former wife, agreed to pay a total of dollars 223,521, of which dollars 103,792 represented forfeitures, while Richard Shephard, Jon Sheinberg's business manager, agreed to pay dollars 112,092, including dollars 53,368 in forfeitures.
A Washington newsletter has reported that lawyers of the Federal Trade Commission are recommending an injunction against Microsoft relating to its trade practices in the computer software industry.
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