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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
ARONDS SECURITIES INTELLIGENT ELECTRONICS GARZONI EASTERN DISTRICT COMPLAINT EXCHANGE COMMISSION MICHIGAN ALLEGES ELECTRONICS COMMON STOCK REAL ESTATE KMART OFFICEMAX MARK MICHAEL DISTRICT COURT CIVIL INSIDER TRADING INTELLIGENT ELECTRONICS COMMON CHICAGO BOARD OPTIONS NON-PUBLIC INFORMATION SALE BIZMART OPTION CONTRACTS PROFIT UNITED STATES INDICTMENTS ASSISTANCE MATTER |
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Litigation Release No. 15128 / October 21, 1996
SECURITIES AND EXCHANGE COMMISSION v. MARK J. ARONDS AND
MICHAEL J. GARZONI, U.S. District Court for the Eastern District
of Michigan, Civil Action No. 96-74813
The Securities and Exchange Commission announced the filing
of a complaint in the U.S. District Court for the Eastern
District of Michigan against Mark J. Aronds and Michael J.
Garzoni alleging that they engaged in insider trading in the
securities of Intelligent Electronics, Inc., an Exton,
Pennsylvania-based company. Intelligent Electronics common stock
is traded on NASDAQ, and its options are listed on the Chicago
Board Options Exchange and the Pacific Stock Exchange. The
complaint alleges that in late 1992 in the course of his
employment in the real estate department of Kmart Corporation of
Troy, Michigan, Garzoni obtained material, non-public information
about Intelligent Electronics' sale of its BizMart, Inc.
subsidiary to OfficeMax, Inc., a subsidiary of Kmart. The
complaint alleges that Garzoni tipped his friend Aronds,
president of the Network Group, Inc., a Houston, Texas-based
commercial real estate brokerage firm which was used by Kmart to
market real estate in Texas.
The complaint further alleges that while in possession of
material, non-public information Aronds subsequently purchased
Intelligent Electronics call option contracts prior to the
December 4 public announcement of the sale of BizMart to
OfficeMax. From November 16 to December 3, 1992, Aronds,
invested $176,677 in 2,000 shares of Intelligent Electronics
common stock and 1,130 Intelligent Electronics call option
contracts. Aronds later sold his securities during December
1992, January 1993 and March 1993 for a total profit of $263,835.
The complaint seeks injunctive relief against the defendants for
the alleged violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder as well as
disgorgement of all illegal profits, prejudgment interest and
civil penalties.
Simultaneously, the United States Attorney's Office for the
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