SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17554 / June 11, 2002
SEC v. JEAN-JACQUES DEGROOF and FRANCIS DEGROOF, Civil Action No. 02 CV 4385 (GBD) (S.D.N.Y. June 11, 2002)
SEC FILES SETTLED INSIDER TRADING ACTION AGAINST TWO FOREIGN NATIONALS IN CONNECTION WITH THE ACQUISITION OF DELHAIZE AMERICA, INC. BY IT BRUSSELS' BASED AFFILIATE, DELHAIZE LE LION
The Securities and Exchange Commission today filed suit in the United States District Court for the Southern District of New York against two individuals for alleged insider trading in the common stock of Delhaize America, Inc. shortly before an announcement, on September 7, 2000 of an offer by Brussels based Delhaize Le Lion to purchase all of the shares of Delhaize America, Inc. that it did not already own. Without admitting or denying any of the substantive allegations, the defendants consented to the entry of orders which would enjoin them from future violations, order them to pay disgorgement plus prejudgment interest and civil monetary penalties.
Named as defendants in the Complaint are Jean-Jacques Degroof who resides in Brussels, and his brother Francis Degroof, who resides in the French West Indies.
The Complaint alleges that Jean Jacques Degroof purchased a total of 39,300 shares of Delhaize America, Inc. on September 5th and 6th 2000 . The Complaint also alleges that on September 5, 2000, Francis Degroof purchased 25,000 shares. The transactions were executed through the facilities of the New York Stock Exchange.
The Complaint alleges that when the defendants purchased the shares, they possessed material, nonpublic information about the contemplated buyout offer and that they knew, or recklessly disregarded the fact, that they obtained the material nonpublic information in breach of fiduciary or similar duties of trust and confidence.
The Complaint further alleges that as a result of the announcement of the buyout offer, the price of Delhaize America, Inc. shares increased by approximately 15% resulting in illegal profits of $85,674 for Jean Jacques and $50,000 for Francis Degroof.
Without admitting or denying any of the substantive allegations of the complaint, Jean Jacques and Francis Degroof submitted settlement offers (which were filed with the Complaint) in which they consented to the entry of final judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and which order them to disgorge their trading profits of $85,674 and $50,000 respectively, plus prejudgment interest, and pay civil monetary penalties of $85,674 and $50,000 respectively.
The Commission acknowledges the assistance provided by the New York Stock Exchange in this matter.
http://www.sec.gov/litigation/litreleases/lr17554.htm
