SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

LITIGATION RELEASE NO. 16561 / May 23, 2000

SECURITIES AND EXCHANGE COMMISSION v. ANTHONY POLLAK, YOSI RUBENSTEIN, AND MICHAEL SHEMMER, Civil Action No. 00-CIV-3892 (S.D.N.Y.) (SHS)

SEC SUES FORMER CHEMICAL SECURITIES ANALYST AND ISRAELI MONEY MANAGERS IN INTERNATIONAL INSIDER TRADING CASE

The Securities and Exchange Commission ("Commission") today filed a settled civil injunctive action alleging illegal insider trading by Anthony Pollak, 31, an Israeli citizen and resident who was formerly a financial analyst at Chemical Securities, Inc., Yosi Rubenstein, 44, and Michael Shemmer, 54, formerly partners in Rubenstein-Shemmer Investments, a Tel Aviv money management firm. The Complaint, filed in the United States District Court for the Southern District of New York, alleges that from February through July 1995, Pollak repeatedly misappropriated material nonpublic confidential information to which he had access at Chemical, and tipped Rubenstein and Shemmer to buy the securities of five separate issuers: DSG International Ltd., Truck Components Corp., Playtex Products, Inc., Maxus Energy Corp., and Best Products Company, Inc. The securities were allocated to Rubenstein's and Shemmer's own accounts, to an account in Pollak's name, and to accounts of other customers in the firm. The Complaint alleges that the trades based on Pollak's tips generated profits of $542,177. Without admitting or denying the Commission's allegations, the defendants agreed to a settlement in which they will, among other things, disgorge those profits.

In particular, the Complaint alleges the following:

• Until July 1995, Pollak worked as a financial analyst in the Structured Finance Department at Chemical Securities, Inc ("Chemical"). That Department, among things, arranged the financing Chemical's corporate customers required for significant business transactions.

• Starting in early 1995, Pollak began tipping Rubenstein and Shemmer to buy U.S.-listed securities based on material nonpublic information he obtained at Chemical. Pollak was careful not to tip them concerning transactions on which he worked directly. Instead, he tipped them with information he obtained in conversations with other Chemical employees, from examining documents on the desks of other employees, and from other means.

• Pollak's tips were based on Chemical's involvement in the following transactions:

• On February 28, 1995, Maxus Energy Corp. announced that YPF, S.A. would acquire all of its common stock through a tender offer. Several days before the public announcement, Salomon Brothers contacted Chemical to assist on the acquisition, although Chemical declined to offer its services. Rubenstein-Shemmer Investments purchased 10,000 shares of Maxus stock one day prior to the announcement, which it sold one day following the announcement for a profit of $17,298.

• On March 2, 1995, Playtex Products, Inc. announced that HWH Capital Partners, LP would purchase 20 million newly issued shares of Playtex stock for $180 million. Chemical agreed to revisions of Playtex's preexisting credit agreement as part of the securities sale. From March 3 through March 14, 1995, Rubenstein-Shemmer Investments purchased 45,400 shares of Playtex stock and 160 Playtex call options, which it sold after the public announcement for a profit of $2,571.

• On April 21, 1995, DSG International, Ltd. announced that a DSG management-led group proposed to acquire all the outstanding shares of DSG common stock. Chemical had been hired by the DSG management group to provide financing for this transaction. From March 27 through April 19, Rubenstein-Shemmer Investments purchased a total of 73,000 shares of DSG stock, which it sold following the public announcement for profits of $398,167.

• On June 14, 1995, Truck Components Corp. announced that Johnstown American Industries, Inc. had agreed to acquire Truck Components. Johnstown had hired Chemical to provide financing for the acquisition. Rubenstein-Shemmer Investments, starting on May 12 and continuing through June 12, 1995, purchased 42,000 shares of Truck Components stock, which it sold immediately following the public announcement for profits of $124,141.

• During late 1994 and 1995, Best Products Company, Inc. hired Chemical to conduct due diligence for a possible business combination with Service Merchandise Company, Inc. From May 3, through May 12, 1995, Rubenstein-Shemmer Investments purchased 7,000 shares of Best Products stock. However, no merger or other business combination was ever consummated between the two companies, and Rubenstein-Shemmer Investments sold its Best Products stock at a net loss.

Simultaneous with the filing of the Complaint, Pollak, Rubenstein, and Shemmer each settled the Commission's action against them, without admitting or denying the allegations in the Commission's Complaint, by consenting to injunctions against future violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder. Rubenstein and Shemmer agreed to disgorge, jointly and severally, $542,177, together with prejudgment interest thereon; however, collection of all of those funds, with the exception of $15,000 to be paid by Rubenstein, has been waived based on their demonstrated inability to pay based upon the sworn representations in their statements of financial condition. Pollak, the alleged tipper, has agreed to pay the $527,177 balance of the principal disgorgement obligation.

The Commission acknowledges and expresses gratitude for the substantial assistance it received in this matter from the Israel Securities Authority.

http://www.sec.gov/litigation/litreleases/lr16561.htm