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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COURT DEFENDANTS TRADING EXCHANGE SECURITIES EXCHANGE COMMISSION PURCHASERS JUDGEMENT DISTRICT UNITED STATES UNKNOWN COMMON STOCK INSIDER TRADING COMPLAINT OKHMAN MASHEVICH CONSENTS ENTRY ENJOIN VIOLATING EXCHANGE ACT THEREUNDER TRADING PROFITS PAY CIVIL PENALTY DISGORGED FUNDS DISTRIBUTION PURSUANT PLAN STAFF |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16044 / January 25, 1999
SEC v. ONE OR MORE UNKNOWN PURCHASERS OF CALL OPTIONS AND
COMMON STOCK OF USCS INTERNATIONAL, INC., No. 98-Civ-6327
(S.D.N.Y.) (September 8, 1998)
SEC ANNOUNCES SETTLEMENTS WITH PREVIOUSLY “UNKNOWN
PURCHASERS
The Securities and Exchange Commission announced that
on January 25, 1999, Final Judgments were entered by the
United States District Court for the Southern District of
New York which reflect settlements reached with the two
previously “unknown„ defendants in this insider trading
case. The Commission’s Complaint, filed on September 8,
1998, alleged that the then “unknown purchasers„ had engaged
in illegal insider trading by secretly purchasing call
options and common stock of USCS International, Inc. through
a Swiss account just hours before it was announced that DST
Systems, Inc. had agreed to acquire USCS in a merger.
On September 8, 1998, the Court froze the proceeds of
the defendants’ trading, approximately $2 million, which
were about to be transferred out of the country. Nine days
later, after the defendants failed to comply with a Court
Order directing them to identify themselves, the Court
entered a preliminary injunction, continuing the asset
freeze indefinitely. Thereafter, defendants identified
themselves as Igor Okhman of Studio City, California and
Frank Mashevich of Vancouver, British Columbia. Shortly
after the Commission began limited discovery, the defendants
offered to settle the action without admitting or denying
the substantive allegations of the Complaint.
Okhman consented to the entry of a Final Judgment which
would (1) enjoin him from violating Section 10(b) of the
Securities and Exchange Act of 1934 and Rule 10b-5
thereunder, (2) order that he disgorge alleged illegal
trading profits of $190,454; and (3) order that he pay a
civil penalty of $190,454. Mashevich submitted an offer of
settlement in which he consents to the entry of a Final
Judgment which would (1) enjoin him from violating Section
10(b) of the Exchange Act and Rule 10b-5 thereunder; (2)
order that he disgorge alleged illegal trading profits of
$164,837 ; and (3) order that he pay a civil penalty of
$164,837. The settlements provide that the disgorged funds
be deposited with the Court for distribution pursuant to a
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