U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20630 / June 26, 2008

Securities and Exchange Commission v. Eric Patton, et al., Civil Action No. 02 CV 2564 (E.D.N.Y., June 10, 2008)

SEC Wins Jury Verdict in Insider Trading Case; Six Other Defendants Settle

On June 10, 2008, United States District Court Senior Judge Sterling Johnson, Jr. entered a Final Judgment against Constantine Stamoulis ("Stamoulis") ordering him to pay nearly $275,000 after a jury in the Eastern District of New York found him liable for insider trading in the stock of WLR Foods, Inc. ("WLRF") in September 2000. The United States Securities and Exchange Commission ("Commission") alleged that Stamoulis was tipped about an impending acquisition involving WLRF, and then purchased 10,000 shares of WLRF stock just one day before WLRF announced that it was being acquired by Pilgrim's Pride Corporation. Following the announcement, Stamoulis sold the shares and realized gains of nearly $60,000. The jury found that Stamoulis violated Section 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Judge Johnson enjoined Stamoulis from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and ordered Stamoulis to pay disgorgement of his trading profits, prejudgment interest and a penalty three times the amount of his realized gains.

In addition to the jury verdict against Stamoulis, the Commission also announces that defendants Konstantinos Orfanakos ("Orfanakos"), Dimitrios Kostopoulos ("Kostopoulos"), Lampros Moumouris ("Moumouris"), Angelo Rigas ("Rigas"), Konstantine Drakopoulos ("Drakopoulos") and John Tsiforis ("Tsiforis") have agreed to settle the insider trading charges for their alleged involvement in trading and/or tipping in WLRF stock.

With the judgment against Stamoulis, the Commission successfully concludes a case that originally involved 14 defendants and 3 relief defendants when the civil injunctive action was filed in April 2002. The Commission's complaint alleged that Eric Patton, a WLRF insider, learned material, non-public information about an impending acquisition of WLRF. According to the complaint, Eric then tipped his brother, Steven Patton who, in turn, tipped his broker, Michael Nicolaou ("Nicolaou"). The complaint alleged that Nicolaou then tipped, among others, his friends Tsiforis and Drakopoulos, a registered representative, and that Drakopoulos traded on the information and tipped, among others, Kostopoulos, also a registered representative, and Moumouris. As alleged in the complaint, Kostopoulos and Moumouris both traded on the information. The complaint also alleged that Tsiforis tipped Orfanakos and Stamoulis, who both traded on the information, and that Drakopoulos or Kostopoulos tipped Rigas, who traded on the information and tipped his relatives, Gregory Rigas, George Rigas and Antonia Bregianos. The United States Attorney's Office for the Eastern District of New York brought related criminal charges against Stamoulis, Orfanakos, Kostopoulos, Rigas, Moumouris, Drakopoulos and Tsiforis. Orfanakos, Kostopoulos and Drakopoulos each pleaded guilty in the criminal proceeding to conspiracy to commit securities fraud. Tsiforis pleaded guilty to perjury. The criminal charges were dismissed as to Stamoulis, Rigas and Moumouris.

Orfanakos, Kostopoulos, Moumouris, Rigas, Drakopoulos and Tsiforis have agreed, without admitting or denying the Commission's allegations, to settle the Commission's complaint against them under the following terms:

• Orfanakos consented to the entry of a Final Judgment that permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment further orders him to pay $3,172 in disgorgement, an amount equal to his WLRF trading profits, $579 in prejudgment interest and a one-time civil penalty equal to his disgorgement.

• Kostopoulos consented to the entry of a Final Judgment that permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment also acknowledges that Kostopoulos disgorged his trading profits as part of the relief ordered in the parallel criminal proceeding.

• Moumouris consented to the entry of a Final Judgment that permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment further orders Moumouris to disgorge $74,300, the total amount of his WLRF trading profits, to pay prejudgment interest of $15,670, and to pay a civil money penalty of $40,000.

• Rigas consented to the entry of a Final Judgment that permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment further orders Rigas to disgorge $131,743, the total amount of his trading profits and those of his tippees, and pay prejudgment interest of $8,564. In addition, the Final Judgment orders Rigas to pay a one-time civil money penalty of $18,039, which equals the amount of his personal trading profits.

• Drakopoulos consented to the entry of a Final Judgment that permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment further orders Drakopoulos to pay a one-time civil money penalty of $14,209, an amount equal to his WLRF trading profits. The Final Judgment does not order Drakopoulos to pay disgorgement because his trading profits were disgorged by another defendant as part of the relief ordered in the parallel criminal proceeding.

• Tsiforis consented to the entry of a Final Judgment that permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

The Court entered the Final Judgments as to Orfanakos, Kostopoulos, Moumouris and Rigas on July 11, 2007, the Final Judgment as to Drakopoulos on February 1, 2008, and the Final Judgment as to Tsiforis on March 28, 2008.

Finally, the Commission has dismissed its insider trading charges against defendants Eric Patton, Steven Patton, Gregory Rigas, George Rigas and Antonia Bregianos and relief defendants Maria Rigas, Eugenia Rigas and Kathy Drakopoulos.

For more information about this case, refer to Litigation Release No. 17495 (April 30, 2002) and Litigation Release No. 17775 (October 8, 2002).

http://www.sec.gov/litigation/litreleases/2008/lr20630.htm