==========================================START OF PAGE 1====== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. Litigation Release No. 15010 / August 12, 1996 SECURITIES AND EXCHANGE COMMISSION v. ANDREA FIABANE, PAOLO MOLLO, GIUSEPPE FIABANE AND GIORGIO PICCININI, United States District Court for the Southern District of New York, Civil Action No. 96-6088 (KMW) The Securities and Exchange Commission ("Commission") filed a Complaint in the United States District Court for the Southern District of New York alleging insider trading by three employees of Luxottica Group SpA ("Luxottica"), an Italian eyeglass manufacturer, and a brother of one of those employees. The Complaint alleges that Andrea Fiabane, the manager of Luxottica's European operations, Paolo Mollo ("Mollo"), a production systems manager at Luxottica's headquarters in Agordo, Italy, Giorgio Piccinini ("Piccinini"), the administrative manager of Luxottica's Milan subsidiary, Meccanoptica Leonardo, and Giuseppe Fiabane, Andrea Fiabane's brother, each purchased the securities of the U.S. Shoe Corp. ("U.S. Shoe") while in possession of material non-public information concerning Luxottica's planned tender offer for U.S. Shoe. The Complaint alleges that the defendants' trading violated Sections 10(b) and 14(e) of the Securities and Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5 and 14e-3 thereunder. In its Complaint, the Commission seeks a permanent injunction against future violations of these provisions, and an order requiring the four defendants to disgorge their illegal trading profits (a total of $261,894) plus prejudgment interest and to pay civil penalties pursuant to the Insider Trading Sanctions Act of 1984 (for total payments of approximately $520,000). According to the Complaint, in mid-January 1995 Mollo learned during a due diligence review by Luxottica's investment bankers that Luxottica was considering a merger with or acquisition of U.S. Shoe, or its subsidiary, Lenscrafters. The Complaint alleges that shortly thereafter, Andrea Fiabane, whose office was adjacent to Mollo's, used the information Mollo had received in an attempt to learn more about the proposed transaction from another employee. The Complaint further alleges that on February 14, 1995 Andrea Fiabane was consulted as to how Luxottica should inform its European distributors of the proposed transaction and that, as a consequence, he learned additional details of the planned tender offer, including the proposed timing of the public announcement. The Complaint alleges that on or before February 15, 1995, Andrea Fiabane disclosed information concerning the planned tender offer to Mollo. The Complaint alleges that between February 14 and March 1, 1995, Andrea Fiabane bought 9,000 shares of U.S. Shoe common stock at two ==========================================START OF PAGE 2====== Italian banks, and that on February 15, 1995, Mollo bought 11,000 shares of U.S. Shoe common stock at an Italian bank. According to the Complaint, Andrea Fiabane also tipped his brother, Giuseppe Fiabane, concerning Luxottica's plans to acquire U.S. Shoe, and recommended that another employee of Luxottica purchase U.S. Shoe. The Complaint alleges that between February 21 and March 1, 1995, Giuseppe Fiabane, while in possession of the material, nonpublic information provided by his brother Andrea, bought 6,000 shares of U.S. Shoe common stock and 410 call option contracts for U.S. Shoe stock at an Italian bank. The Complaint alleges that the Luxottica employee to whom Andrea Fiabane recommended U.S. Shoe purchased 1,500 shares of the stock on February 22, 1995. Separately, the Complaint alleges that Piccinini obtained material, nonpublic information concerning the tender offer when he overheard his immediate supervisor, Giovanni Malavasi, the former Secretary to the Luxottica Board of Directors, discussing Luxottica's intentions to make a tender offer for U.S. Shoe. The Complaint alleges that on February 17, 1995, while in possession of that information, Piccinini purchased 4,000 shares of U.S. Shoe common stock through an Italian bank. The Commission has already brought and settled by consent a civil injunctive action against Malavasi alleging insider trading in the securities of U.S. Shoe. See SEC v. Malavasi, No. 95-CV-1691 (D.D.C. Sept. 8, 1995), Lit. Rel. No. 14626. Simultaneously with the filing of the Complaint, the four defendants, without admitting or denying any of the allegations in the Complaint, consented to the entry of orders enjoining them from violating Sections 10(b) and 14(e) of the Exchange Act, and Rules 10b-5 and 14e-3 thereunder, and requiring each to disgorge and pay prejudgment interest on their illegal profits and to pay a penalty. Andrea Fiabane will disgorge $46,191, which represents his illegal profits and those of the Luxottica employee to whom he recommended the purchase of U.S. Shoe, and pay a civil penalty of $38,455; Mollo will disgorge $41,826 and pay a civil penalty of $41,826; Giuseppe Fiabane will disgorge $157,577 and pay a civil penalty of $157,577; and Piccinini will disgorge $16,300 and pay a civil penalty of $2,140. The Commission's investigation in this matter is continuing. The Commission acknowledges the assistance of the Italian Commissione Nazionale per la Societa e la Borsa, the New York Stock Exchange and the Philadelphia Stock Exchange. Luxottica Group SpA has cooperated with the Commission's investigation.