SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16972 / April 23, 2001
SEC CHARGES TWO MORE CENTRAL MAINE POWER EMPLOYEES WITH INSIDER
TRADING THROUGH 401(k) PLAN
The Securities and Exchange Commission today announced the filing of
an injunctive action against Robert K. Gasper and James D. Fairfield
for illegal insider trading in the common stock of CMP Group, Inc. The
complaint alleges that Gasper and Fairfield, former employees of
Central Maine Power Company, a subsidiary of CMP, invested all of the
assets in their 401(k) plans in a CMP stock fund on June 14, 1999. The
next day, CMP publicly announced its plan to merge with Energy East
Corporation and the price of CMP stock rose approximately 28%. Gasper,
who invested $336,528, made an illegal profit of $88,604 and
Fairfield, who invested $304,556, made an illegal profit of $80,186.
Gasper, a resident of Manchester Maine, was the Manager of
Interconnection Agreements Administration for Central Maine.
Fairfield, a resident of West Gardiner, Maine, was the Manager of
Legislative Affairs for Central Maine. Gasper and Fairfield have both
agreed to settle the action without admitting or denying the
Commission's allegations.
The Commission's complaint alleges that Gasper and Fairfield were in
possession of nonpublic information about the merger at the time of
their trades. According to the complaint, Gasper first learned about
the planned merger in late April or early May 1999 when Energy East
was conducting due diligence. Gasper was asked to retrieve information
for a "top secret" project and, by his own admission, correctly
concluded that someone was "looking at the company." On the day of
Gasper's trade, Gasper's supervisor scheduled a highly unusual meeting
for 4 01 p.m. After learning of the meeting, Gasper concluded that a
buyout announcement was imminent and executed his trade.
The complaint also alleges that Gasper tipped Fairfield. On the day of
their trades, Fairfield telephoned Gasper shortly before the close of
the market. Gasper informed Fairfield of the unusual 4 01 p.m.
meeting, stated that the acquisition of CMP might be announced, and
told Fairfield that he was going to transfer all of his 401(k) assets
to the CMP stock fund. Minutes after the conversation, Fairfield
executed his trade. The complaint also alleges that during the week
prior to the merger announcement, Fairfield's supervisor had cautioned
Fairfield about trading in CMP stock.
Simultaneously with the filing of the complaint, Gasper and Fairfield,
without admitting or denying the Commission's allegations, consented
to the entry of a judgment permanently enjoining them from violating
SNIPPETS:
TRADING THROUGH 401PLAN
The Securities and Exchange Commission today announced the filing of an injunctive action
The complaint alleges that Gasper and Fairfield, former employees of Central Maine Power
CMP publicly announced its plan to merge with Energy East Corporation and the price of CMP
Gasper, who invested $336,528, made an illegal profit of $88,604 and Fairfield, who invested
Gasper, a resident of Manchester Maine, was the Manager of Interconnection Agreements
The Commission's complaint alleges that Gasper and Fairfield were in possession of nonpublic
Gasper first learned about the planned merger in late April or early May 1999 when Energy
After learning of the meeting, Gasper concluded that a buyout announcement was imminent and
The complaint also alleges that during the week prior to the merger announcement, Fairfield's
Simultaneously with the filing of the complaint, Gasper and Fairfield, without admitting or
Gasper agreed to disgorge $168,790, representing his profits and his tippee Fairfield's
This is the second insider trading action brought against Central Maine employees arising
|