SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16392 / December 16, 1999
FINAL REMAINING DEFENDANTS SETTLE SEC INSIDER TRADING CASE AND AGREE
TO PAY ALMOST $300,000 IN DISGORGEMENT AND CIVIL PENALTIES
Securities and Exchange Commission v. Daniel Lambert, John Pape, James
Verrillo and Gerard Verrillo, Civil Action No. 98-2280-CIV-KING (S. D.
Florida, filed Sept. 29, 1998).
The Securities and Exchange Commission (SEC) announced that on
December 2, 1999, the United States District Court for the Southern
District of Florida entered a permanent injunction enjoining James
Verrillo (J. Verrillo) of Lighthouse Point, Florida, and his father,
Gerard Verrillo (G. Verrillo), of Syracuse, New York from violating
Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934
(Exchange Act). In addition, the Court ordered J. Verrillo to disgorge
$220,548 in ill-gotten gains and prejudgment interest and to pay a
civil penalty to the United States Treasury of $46,367. The Court
ordered G. Verrillo to disgorge $16,980 in ill-gotten gains and
prejudgment interest and to pay a civil penalty to the United States
Treasury of $3570. Both J. Verrillo and G. Verrillo consented to the
entry of the order without admitting or denying the SEC's allegations.
The Verrillos were the last remaining defendants in a lawsuit the SEC
filed on September 29, 1998 alleging insider trading involving the
securities of Vacation Break U.S.A. (Vacation Break), a former Ft.
Lauderdale company in the time-share business. The SEC's complaint
charged four individuals with having violated the federal securities
laws by trading on the basis of non-public information, or having
provided non-public information, in advance of a merger with The
Berkley Group, Inc. (Berkley Group) that Vacation Break announced on
November 27, 1996. Following news of the merger, Vacation Break's
stock, which was then traded on the NASDAQ, closed at about 56% higher
than its price the prior day.
The SEC's complaint alleged that defendant Daniel Lambert (Lambert),
an attorney residing in the Ft. Lauderdale, Florida area, negotiated
the Vacation Break/Berkley Group merger in the fall of 1996 on behalf
of the Berkley Group and other related companies, all of which were
controlled by Lambert's family. The SEC further alleged that beginning
in October 1996, Lambert provided his friend and then law partner,
defendant John Pape (Pape), a Miami area attorney, with inside
information in advance of the merger announcement. The SEC alleged
that Pape used that information, and approximately $74,000 that
Lambert provided him, to accumulate Vacation Break stock. After the
Vacation Break/Berkley Group merger announcement, Pape sold his
SNIPPETS:
FINAL REMAINING DEFENDANTS SETTLE SEC INSIDER TRADING CASE AND AGREE TO PAY ALMOST $300,000
Securities and Exchange Commission v. Daniel Lambert, John Pape, James Verrillo and Gerard
The Securities and Exchange Commission announced that on December 2, 1999, the United States
Verrillo) of Lighthouse Point, Florida, and his father, Gerard Verrillo, of Syracuse, New
In addition, the Court ordered J. Verrillo to disgorge $220,548 in ill-gotten gains and
The Verrillos were the last remaining defendants in a lawsuit the SEC filed on September 29,
The SEC's complaint charged four individuals with having violated the federal securities laws
Following news of the merger, Vacation Break's stock, which was then traded on the NASDAQ,
The SEC's complaint alleged that defendant Daniel Lambert, an attorney residing in the Ft.
The SEC further alleged that beginning in October 1996, Lambert provided his friend and then
The SEC's complaint also alleged that J. Verrillo, who did telemarketing work for both
On November 5, 1999, the Court entered an order permanently enjoining Lambert and Pape from
Both Lambert and Pape consented to the entry of the order without admitting or denying the
In its complaint, the SEC sought permanent injunctions against future violations of Section
The SEC filed a related complaint against Mitchell Cairo, a doctor in the Washington, D.C.
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