SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15753 / May 21, 1998
SECURITIES AND EXCHANGE COMMISSION v. TERRY S. SHILLING (United States
District Court for the District of New Hampshire, Civ. No. 98-CV329-B)
The Commission announced, on May 21, 1998, the filing of a
Complaint
alleging that Terry S. Shilling ( Shilling ), a former Healthsource,
Inc.
( Healthsource ) executive and a resident of Marietta, Georgia, engaged
in
unlawful insider trading in the common stock of Healthsource.
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 alleges 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 alleges that the Healthsource
executive
emphasized the confidential and privileged nature of the information.
According to the Complaint, on February 20, 1997, after his
conversations
with the Healthsource executive, Shilling bought 1,900 shares of
Healthsource common stock for $15-1/8 per share. The Complaint further
alleges that Shilling did not preclear his February 20, 1997 trade as
required by Healthsource s procedures and that, had he done so, he
would
not have received approval for this trade. On February 28, 1997,
Healthsource and CIGNA announced an agreement to merge the two
companies,
with a premium payable to Healthsource shareholders and with CIGNA as
the
surviving entity. The Complaint alleges that, by purchasing
Healthsource
shares on February 20, in advance of the February 28, 1997 merger
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. TERRY S. SHILLING (United States District Court for the
The Commission announced, on May 21, 1998, the filing of a Complaint alleging that Terry S.
According to the Complaint, on February 19, 1997, a Healthsource executive called Shilling
The Complaint alleges that the Healthsource executive also told Shilling that Healthsource
According to the Complaint, on February 20, 1997, after his conversations with the
The Complaint further alleges that Shilling did not preclear his February 20, 1997 trade as
The Complaint was filed in the United States District Court for the District of New Hampshire.
Simultaneously with the filing of the Complaint, Shilling consented, without admitting or
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