SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

LITIGATION RELEASE NO. 17624 / July 22, 2002

SECURITIES AND EXCHANGE COMMISSION v. HUGH THRASHER, JOHN H. ANDERSON, EZRA CHAMMAH, STANLEY ELBAUM, SCOTT FORBES, GUILLERMO GOMEZ a/k/a WILLIAM GOMEZ, STEPHEN V. R. GOODHUE, JR., IRA GORMAN, GORMAN COMMODITIES & SECURITIES, INC., JONATHAN S. HIRSH, RONALD KUZNETSKY, DARRELL SANDY MARSH, JACK P. MARSH, MICHAEL R. NEWMAN, ROGER K. ODWAK, ANGELO PETROTTO, LEE ROSENBLATT, ROBERT SACKS, JEFFREY A. SANKER, DAVID SCHAEN, LEONARD SCHAEN, JULIAN SCHOR, GREGG R. SHAWZIN and MARK R. SHAWZIN, 92 Civ. 6987 (S.D.N.Y.) (JFK)

On June 11 and June 17, 2002, the United States District Court in Manhattan entered final judgments against Hugh Thrasher, Jonathan S. Hirsh, Lee Rosenblatt, and Mark R. Shawzin, the four remaining defendants in SEC v. Hugh Thrasher, et al, an insider trading case brought by the Commission against twenty-four defendants. According to the Commission's amended complaint, filed on March 4, 1993, Thrasher, while employed as an officer of Motel 6, L.P., communicated material, nonpublic information to a close friend concerning a planned tender offer for the company by Accor S.A. in August 1990. The other twenty-three defendants named in the amended complaint, including Hirsh, Rosenblatt, and Mark Shawzin, engaged in insider trading by purchasing the securities of Motel 6 while in possession of that information before the tender offer was announced on July 12, 1990.

The Commission's complaint alleges that based on this conduct, all of the defendants violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-3 thereunder.

Specifically, the Commission's amended complaint alleges as follows:

• Between late May 1990 through July 12, 1990, Thrasher, then Motel 6's executive vice president in charge of corporate communications, told Carl Harris, a close friend whom Thrasher supported financially, that Accor and Motel 6 were in negotiations for Accor's acquisition of Motel 6.

• Harris, in exchange for a share of trading profits, tipped relatives, roommates, friends, and acquaintances, setting off a chain of illegal trading. Among those tipped by Harris was Gregg Shawzin, who then tipped his brother, Mark Shawzin.

• Between June 12, 1990 and July 5, 1990, Mark Shawzin purchased Motel 6 securities and tipped others about the planned tender offer while in possession of material, non-public information. Mark Shawzin profited in the amount of approximately $126,000 from his unlawful trading and tipping.

• Harris also tipped Jeffrey Sanker, his roommate, who tipped his friend Hirsh. Hirsh then conveyed the information disclosed to him by Sanker to his boss and close friend, Rosenblatt.

• Between June 7, 1990 and July 12, 1990, Hirsh purchased Motel 6 securities while in possession of material, non-public information for a profit of approximately $29,000. Also, between June 18, 1990 and July 12, 1990, Hirsh and Rosenblatt jointly purchased Motel 6 securities for a profit of approximately $360,000.

On June 11, 2002, the Court entered a Final Consent Judgment of Permanent Injunction and Other Relief against Mark Shawzin. On June 17, 2002, the Court entered Final Judgments of Permanent Injunctions and Other Relief against Thrasher, Hirsh, and Rosenblatt. Without admitting or denying the allegations in the amended complaint, each defendant consented to a permanent injunction from violating Sections 10(b) and 14(e) of the Securities and Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. In addition, Thrasher agreed to pay $49,100 in disgorgement, representing the profits made by his alleged tippee, Harris, and a civil penalty of $49,100. Thrasher also agreed to be barred from acting as an officer or director of any public company for a period of five years. Hirsh agreed to pay a total of $520,596 consisting of his illegal trading profits and prejudgment interest. Finally, Rosenblatt agreed to pay $180,032 to the plaintiff class in a related class action suit, an amount equal to his alleged illegal trading profits.

These settlements conclude ten years of litigation in which the Commission has obtained judgments against twenty-two defendants, providing for injunctive relief and ordering payment of over $6.36 million in disgorgement and civil penalties. (See prior Litigation Release Nos. 13544, 13735, 15133, 15246, 15304, and 15476 for a further description of the allegations contained in the Commission's amended complaint and previous settlements with other defendants).