SEC charges eight insiders over 'going private' transactions

Exceed

13/03/2015 19:52

By Jonathan Stempel 
    NEW YORK, March 13 (Reuters) - Eight corporate officers, 
directors and major shareholders were charged by the U.S. 
Securities and Exchange Commission on Friday with waiting too 
long to tell the investing public of material changes relating 
to their plans to take three companies private. 
    The defendants, who did not admit or deny wrongdoing, will 
pay $258,750 of civil fines for allegedly concealing steps to 
effect "going private" transactions, such as forming shareholder 
groups, obtaining necessary waivers, and determining how 
transactions should be conducted. 
    While the penalties are not large and the three companies 
are not household names, the cases reflect SEC Chair Mary Jo 
White's "broken windows" approach to enforcing securities laws, 
which assumes the pursuit of relatively small cases will deter 
others from bigger violations.   
    "Investors are entitled to current and accurate information 
about the plans of large shareholders and company insiders," 
Andrew Ceresney, head of the SEC enforcement division, said in a 
 statement. "Stale, generic disclosures that simply reserve the 
right to engage in certain corporate transactions do not 
suffice." 
    Federal law requires "beneficial owners" who own more than 5 
percent of a company's stock to promptly disclose material 
changes, but the SEC said the defendants waited from a few 
months to more than five years to do so.  
    The defendants include Berjaya Lottery Management, which 
operates in Kuala Lumpur and arranged the privatization of 
California-based International Lottery & Totalizator Systems 
Inc, in which it had a controlling stake. 
    They also included the Ciabattoni Living Trust and five 
other defendants involved in taking California-based hospital 
services company First Physicians Capital Group Inc  FPCG.PK  
private; and Shuipan Lin, chief executive of China-based Exceed 
Co  EDS.O , which makes sports apparel and footwear. 
    A lawyer for Berjaya declined to comment. Lawyers for the 
other defendants were not immediately available for comment. 
 
 (Reporting by Jonathan Stempel; Editing by David Gregorio) 
 ((jon.stempel@thomsonreuters.com;)(646)(223-6317; Reuters 
Messaging: jon.stempel.thomsonreuters.com@reuters.net)) 
 
Keywords: SEC CHARGES/GOINGPRIVATE