CORRECTED

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20654 / July 25, 2008

Securities and Exchange Commission v. One or More Unknown Purchasers of the Call Options for the Common Stock of DRS Technologies, Inc. and American Power Conversion Corp., United States District Court for the Southern District of New York, Civil Action No. 08-cv-6609 (UA) (S.D.N.Y. July 25, 2008)

SEC Obtains Emergency Asset Freeze Against Unknown Call Options Purchaser

The Securities and Exchange Commission today filed an emergency action in the United States District Court for the Southern District of New York against one or more unknown purchasers of the call options for the common stock of DRS Technologies, Inc. and American Power Conversion Corp. ("Unknown Purchaser"). The Commission's complaint alleges that the Unknown Purchaser reaped more than $3 million in profits by engaging in illegal insider trading, prior to announcements related to the acquisitions of DRS and APCC, through an account with UBS AG ("UBS").

The Commission also filed an application for a temporary restraining order in order to freeze the Unknown Purchaser's assets. The Honorable Alvin K. Hellerstein, United States District Judge in the Southern District of New York, issued a temporary restraining order freezing the Unknown Purchaser's assets.

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 acquired DRS call options. According to the complaint, between April 29, 2008 and May 7, 2008, the Unknown Purchaser 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 Commission's complaint further alleges that immediately following a May 8th Wall Street Journal 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 liquidated all DRS call options and made an ill-gotten profit of approximately $1.6 million. Finmeccanica later announced on May 12, 2008 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 acquired APCC call options. According to the complaint, between September 21 and October 20, 2006, the Unknown Purchaser 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 Commission's complaint further alleges that following Schneider's announcement on October 30, 2006, that it would acquire all of APCC's outstanding shares for $31 a share, the Unknown Purchaser liquidated all APCC call options and made an ill-gotten profit of approximately $1.7 million.

By virtue of the conduct described above, the Commission alleges in its complaint that the Unknown Purchaser 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 Commission previously filed a complaint alleging that an Italian citizen engaged in insider trading in DRS securities ahead of the same May 8th disclosure of the merger negotiations between DRS and Finmeccanica. See SEC v. Cristian De Colli, 08 Civ. 4520 (PAC) (S.D.N.Y. May 15, 2008). For more information about that action, see Litigation Release No. 20581 (May 16, 2008).

The Commission 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.

http://www.sec.gov/litigation/litreleases/2008/lr20654.htm