SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15788 / June 19 , 1998
SECURITIES AND EXCHANGE COMMISSION v. TERRY S. SHILLING (United States
District Court for the District of New Hampshire, Civ. No. 98-CV-329
B)
The Commission announced that, on June 1, 1998, Chief Judge Paul
J.
Barbadoro of the United States District Court for the District of New
Hampshire issued a judgment permanently enjoining Terry S. Shilling
( Shilling ) from future violations of Section 10(b) of the Securities
Exchange Act of 1934 ( Exchange Act ) and Rule 10b-5 thereunder and
ordering Shilling to pay disgorgement of $10,761.78, plus prejudgment
interest of $1,168.99, and a civil money penalty of $10,761.78. The
Commission s complaint, filed on May 21, 1998, alleged that Shilling,
a
former Healthsource, Inc. ( Healthsource ) executive and a resident of
Marietta, Georgia, engaged in unlawful insider trading in the common
stock
of Healthsource. Simultaneously with the filing of the Complaint,
Shilling
consented, without admitting or denying the allegations in the
Complaint,
to the entry of the final judgment.
According to the Complaint, on February 19, 1997, a Healthsource
executive called Shilling and informed him, in a confidential
briefing,
that Healthsource was negotiating with both CIGNA Corporation ( CIGNA )
and
another company regarding a business combination. The Complaint
alleged
that the Healthsource executive also told Shilling that Healthsource
was
conducting a mini-auction and that the matter could be decided by the
end
of the following week. The Complaint also alleged that the
Healthsource
executive called Shilling a second time that day to emphasize the
confidential and privileged nature of the information. According to
the
Complaint, on February 20, 1997 and after his conversations with the
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. TERRY S. SHILLING (United States District Court for the
J. Barbadoro of the United States District Court for the District of New Hampshire issued a
former Healthsource, Inc. executive and a resident of Marietta, Georgia, engaged in unlawful
Simultaneously with the filing of the Complaint, Shilling consented, without admitting or
According to the Complaint, on February 19, 1997, a Healthsource executive called Shilling
According to the Complaint, on February 20, 1997 and after his conversations with the
The Complaint further alleged that Shilling did not preclear his February 20, 1997 trade as
On February 28, 1997, Healthsource and CIGNA announced an agreement to merge the two
by purchasing Healthsource shares on February
in advance of the February 28, 1997 merger announcement and for $5-3/4 per share less than
see Litigation Release No. 15753.
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