SEC Emergency Action Freezes Assets of Unknown Purchasers in Insider Trading Scheme

FOR IMMEDIATE RELEASE
2008-149

Washington, D.C., July 25, 2008 — The Securities and Exchange Commission today filed an emergency action to freeze the assets of one or more unknown purchasers of the call options for the common stock of DRS Technologies, Inc. and American Power Conversion Corp., alleging that they reaped more than $3 million in profits by engaging in illegal insider trading through an account with UBS AG prior to public announcements related to acquisitions of those companies.

In a related action in May, the SEC acted quickly to charge a Rome, Italy, resident, Cristian De Colli, with insider trading and obtain an emergency asset freeze of more than $2.1 million in illicit profits he made in DRS securities through suspicious trading in his U.S. brokerage account prior to the public disclosure of advanced merger negotiations. In today's action, the SEC is continuing to pursue others who purchased call options for DRS stock, as well as APCC stock, and recover any ill-gotten gains.

Antonia Chion, Associate Director of the SEC's Division of Enforcement, said, "Illegally trading on insider information corrupts our global markets, and today's action demonstrates our ability and relentless dedication to stop this type of misconduct in its tracks — no matter where it occurs and who is involved."

Christopher R. Conte, Associate Director of the SEC's Division of Enforcement, added, "This case clearly demonstrates the SEC's determination and ability to move fast and decisively to protect investors from insider dealings and threats to fair and open markets."

The Commission's complaint alleges that while in possession of material, nonpublic information regarding merger talks between DRS and Finmeccanica S.p.A, the unknown purchaser(s) acquired DRS call options. According to the complaint, between April 29, 2008 and May 7, 2008, the unknown
purchaser(s) bought 1,820 DRS call options that were out-of-the-money and set to expire in the near term for slightly more than $456,200. The complaint alleges these purchases constituted a very significant percentage of the series volume for DRS call options on the days in question.

The SEC's complaint further alleges that immediately following a May 8 newspaper article reporting the advanced merger negotiations between Finmeccanica and DRS, and after confirmation by DRS that it was engaged in talks regarding a potential strategic transaction, the unknown purchaser(s) liquidated all DRS call options and made an ill-gotten profit of approximately $1.6 million. Finmeccanica later announced on May 12 that it would acquire DRS for $5.2 billion, or $81 a share.

Additionally, the Commission's complaint alleges that, while in possession of material, nonpublic information regarding Schneider Electric SA's plans to acquire APCC, the unknown purchaser(s) acquired APCC call options. According to the complaint, between Sept. 21 and Oct. 20, 2006, the unknown purchaser(s) bought 2,830 APCC call options at a cost of approximately $343,000. The complaint alleges these purchases constituted a very significant percentage of the series volume for APCC call options on the days in question.

The SEC's complaint further alleges that following Schneider's announcement on Oct. 30, 2006, that it would acquire all of APCC's outstanding shares for $31 a share, the unknown purchaser(s) liquidated all APCC call options and made an ill-gotten profit of approximately $1.7 million.

Upon application of the Commission, the Honorable Alvin K. Hellerstein, U.S. District Judge in the Southern District of New York, issued a temporary restraining order freezing the one or more unknown purchaser's assets.

By virtue of the conduct described above, the Commission alleges in its complaint that the unknown purchaser(s) violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and civil money penalties.

The SEC acknowledges the assistance of the Swiss Federal Banking Commission, the U.S. Department of Justice, and the Options Regulatory Surveillance Authority (ORSA) in this matter. The Commission's investigation is continuing.

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For more information, contact:

Antonia Chion, Associate Director
SEC Division of Enforcement
(202) 551-4842

Christopher R. Conte, Associate Director
SEC Division of Enforcement
(202) 551-4834

Daniel Chaudoin, Assistant Director
SEC Division of Enforcement
(202) 551-4952

Mark Kreitman, Assistant Director
SEC Division of Enforcement
202-551-4484

http://www.sec.gov/news/press/2008/2008-149.htm