SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16953A / April 6, 2001
SEC SETTLES CIVIL ACTION AGAINST TWO TENNESSEE BROKERS IN MID OCEAN
LTD. INSIDER TRADING CASE
SECURITIES AND EXCHANGE COMMISSION v. CRISTAN K. BLACKMAN, et al.,
Case No. Case No. 3 99-1072 (Haynes, J.) (M.D. Tenn.).
The Securities and Exchange Commission (SEC) announced today that the
United States District Court for the Middle District of Tennessee
entered a final judgment against two stockbrokers, Cristan K Blackman
and Charles R. Roberts, ordering them to pay disgorgement and civil
money penalties totaling almost $450,000 based on allegations that
they engaged in insider trading in stock or options of Mid Ocean Ltd.
(Mid Ocean). Blackman and Roberts consented to the entry of the final
judgment, without admitting or denying the allegations in the SEC's
complaint, in connection with their settlement of the SEC's injunctive
action.
In November 1999, the SEC filed a complaint against Blackman and
Roberts, both of whom formerly worked at the Nashville office of
Morgan Keegan & Co. (Morgan Keegan), a brokerage firm, alleging that
Blackman learned that Mid Ocean would be taken over shortly before a
March 16, 1998 announcement that Exel Ltd., a Bermuda reinsurance
company, would acquire Mid Ocean. The SEC alleged that Blackman tipped
Roberts about Mid Ocean. The SEC's complaint further alleged that on
March 13, 1998, Blackman purchased Mid Ocean call options and 3,000
shares of Mid Ocean stock, and Roberts purchased 1,000 shares of Mid
Ocean stock. In addition, the complaint alleged that Blackman tipped
his brother and three of his clients, and Roberts tipped twelve of his
clients, about Mid Ocean.
The injunction against Blackman, which was entered by consent on March
16, 2001, and the injunction against Roberts, which was entered by
consent on March 26, 2001, prohibit them from violating Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The
court also ordered Blackman to disgorge $141,558.50, representing the
profits earned by Blackman, his brother and his three clients, plus
pre-judgment interest. The court ordered Roberts, jointly and
severally with Blackman, to disgorge $175,850, representing the
profits earned by Roberts and his twelve clients, plus pre-judgment
interest. Finally, the court ordered Blackman and Roberts to pay civil
penalties of $78,125 and $12,250, respectively, representing their own
profits from trading in Mid Ocean stock or options.
Blackman and Roberts were the last remaining defendants in the SEC's
SNIPPETS:
SEC SETTLES CIVIL ACTION AGAINST TWO TENNESSEE BROKERS IN MID OCEAN LTD. INSIDER TRADING CASE
SECURITIES AND EXCHANGE COMMISSION v. CRISTAN K. BLACKMAN, et al., Case No.
The Securities and Exchange Commission announced today that the United States District Court
Blackman and Roberts consented to the entry of the final judgment, without admitting or
In November 1999, the SEC filed a complaint against Blackman and Roberts, both of whom
The SEC's complaint further alleged that on March 13, 1998, Blackman purchased Mid Ocean call
In addition, the complaint alleged that Blackman tipped his brother and three of his clients,
The injunction against Blackman, which was entered by consent on March 16, 2001, and the
The court also ordered Blackman to disgorge $141,558.50, representing the profits earned by
Finally, the court ordered Blackman and Roberts to pay civil penalties of $78,125 and
Blackman and Roberts were the last remaining defendants in the SEC's action alleging insider
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