February 14, 2006

A Valentine’s Day Story

From Bruce Carton’s Securities Litigation Blog:

“Subject: Be my valentine
From: auntbetty1234

Happy Valentine’s Day to my Nephew Smitmie. He’ll be 12 ½ on thursday. When I take him shopping, he just wants to buy-out everything in the store. He’s so cute and much smarter than most.

Aunt Betty”

You’d never guess it from its face, but the bizarre message above actually was the basis for the SEC”s insider trading case filed and settled recently against one William A. Day, a.k.a. “auntbetty1234.”

The SEC’s litigation release explains that on February 14, 2002, London, England-based Smith & Nephew, plc. and Oratec Interventions, Inc. publicly announced that they had entered into an agreement for Smith & Nephew to acquire all outstanding shares of Oratec through a tender offer of $12.50 per share. The SEC says that on February 13, 2002, approximately twenty-four hours before the acquisition was publicly announced, Day made the anonymous posting above using the online alias “auntbetty1234” on an internet message board dedicated to Oratec, the contents of which revealed that he possessed material, nonpublic information regarding the tender offer, including:

– the name of the acquiring company (“Nephew Smitmie”);
– the price per share (“He’ll be 12 ½”);
– the tender offer structure (“buy-out “);
– and the offer announcement date (“Happy Valentine’s Day”).

“Much smarter than most?” I don’t think so.

[Personal note: If you loved “Say Anything” by Cameron Crowe like I did, there is a nice article about Lloyd Dobler in today’s Washington Post. I even went so far as marrying a Diane – and I met her at a “kegger.” Remember the classic line from the movie, “You don’t meet someone like Diane Court at a kegger.” Well, I did!]

Your Upcoming Proxy Disclosures—What You Need to Do Now!

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Web-Based Governance Tools

In this podcast, Diane Brown, Executive Vice President and General Manager of CT and Wolters Kluwer Corporate Legal Services, provides some insight into the latest technologies that facilitate corporate governance, including:

– As technology evolves, what do you see to be corporate secretaries’ top governance and compliance concerns?
– What’s new about the latest version of hCue?
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