U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19225 / May 17, 2005

Securities and Exchange Commission v. Adrian A. Alexander (formerly known as "Adrian Antoniu"), et al., 00 CV 7290 (LTS) (S.D.N.Y.)

SEC SETTLES INSIDER TRADING ACTION AGAINST DAVID V. STRATMAN FOR $50,000 AND OBTAINS FINAL JUDGMENTS AS TO CONSTANTINE SPYROPOULOS, JACOBUS J. LAM, POTENZA INVESTMENTS, INC., WESTCLIFF PARTNERS, INC., AND QUINTILLION, B.V. IN AMOUNTS TOTALING OVER $1,397,000

On April 25, 2005, the U.S. District Court for the Southern District of New York entered a final judgment by consent against David V. Stratman in connection with insider trading in the securities of U.S. Shoe Corporation and entered a final judgment by default as to Constantine Spyropoulos, Jacobus J. Lam, Potenza Investments, Inc., Westcliff Partners, Inc., and Quintillion, B.V..

The Commission's Complaint, filed in September 2000, alleges eleven individuals and four entities engaged in insider trading in the securities of U.S. Shoe Corp. and Luxottica S.p.A. before the March 3, 1995 public announcement that Luxottica was commencing a hostile tender offer for U.S. Shoe. The Complaint alleges Adrian Alexander obtained information about Luxottica's secret plans to launch a tender offer for U.S. Shoe from Susi Belli, the Manager of Investor and Public Relations for Luxottica, who was then Alexander's girlfriend and is now his wife. According to the Complaint, Alexander tipped others, including his then business partner Patrick J. Rooney, former Chairman of Rooney Pace & Co., Inc., David V. Stratman, his former attorney, and Constantine Spyropoulos. The Complaint alleges Patrick J. Rooney then tipped Jacobus J. Lam, who controlled entities Potenza, Westcliff, and Quintillion. The Complaint alleges each of these entities, as well as Stratman, traded on this information.

Without admitting or denying the Commission's allegations, Stratman consented to a final judgment: (1) permanently enjoining him from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder; and (2) ordering him to pay $50,000 in disgorgement. The Final Judgment entered by the Court as to Jacobus J. Lam, Potenza, Westcliff, and Quintillion orders them collectively to pay $856,395 in penalties, representing three times their alleged trading profit. The Final Judgment entered by the Court as to Spyropoulos orders that he pay disgorgement in the amount of $114,150, prejudgment interest of $84,555, and a three-time penalty in the amount of $342,450. The Court earlier entered injunctions against Spyropoulos, Lam, Potenza, Westcliff, and Quintillion enjoining them from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder.

Earlier in this case, Patrick J. Rooney consented to the entry of a final judgment (1) permanently enjoining him from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder; (2) ordering him to pay disgorgement of $405,290 representing the alleged illegal profits of his tippees including Lam, Potenza, Quintillion, and Westcliffe; (3) ordering him to pay prejudgment interest of $231,568; and (4) ordering him to pay a one-time penalty of $405,290. In addition, Pavel Hillel consented to the entry of a final judgment (1) permanently enjoining him from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder; (2) ordering him to pay a civil penalty of $6,375; and (3) ordering him to pay disgorgement of $6,375 plus prejudgment interest of $5,434.83. John Rooney consented to the entry of a final judgment (1) permanently enjoining him from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder; and (2) ordering him to pay a civil penalty of $102,950. Alexander consented to the entry of a final judgment (1) permanently enjoining him from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder; (2) ordering him to pay a two-time civil penalty of $420,195; and (3) ordering him to pay $2.00 in disgorgement. The remaining defendants, Patrick G. Rooney, Rooney Trading, Inc., Gianna Toffoli, Susi Belli, and Penelope Afouxenide, were earlier dismissed.

For additional information, see Litigation Release Nos. 16733 and 19100.

http://www.sec.gov/litigation/litreleases/lr19225.htm