SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 14754 / December 13, 1995
SECURITIES AND EXCHANGE COMMISSION v. MERVYN COOPER and
KENNETH E. ROTTENBERG, Civil Action No. 95-8535 (RJK) (C.D. Cal.
December 11, 1995)
The Securities and Exchange Commission (the "Commission")
today announced the filing of a Complaint in the United States
District Court for the Central District of California, alleging
illegal insider trading in the securities of Lockheed Corporation
by Mervyn Cooper ("Cooper"), a psychotherapist and licensed
clinical social worker residing in Santa Monica, California, and
Kenneth E. Rottenberg ("Rottenberg") of Thousand Oaks, California,
prior to the August 29, 1994, public announcement that Lockheed and
Martin Marietta Corporation had agreed to merge.
Simultaneously with the filing of the Complaint, and without
admitting or denying the allegations made against him, Cooper
consented to the entry of a Final Judgment of Permanent Injunction
and Other Relief, permanently enjoining him from future violations
of the antifraud provisions, Section 10(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5
thereunder. In addition, the Final Judgment against Cooper orders
him to disgorge illegal profits of $53,458.02 plus prejudgment
interest thereon, and to pay a civil penalty of $53,458.02 pursuant
to Section 21A of the Exchange Act.
The Complaint alleges that in August 1994 Cooper was providing
marriage counseling to a Lockheed executive who was involved in the
due diligence process related to the merger. The Complaint states
that, during a therapy session on the evening of August 22, 1994,
the Lockheed executive confided to Cooper material, nonpublic
information concerning an impending announcement of a major
transaction involving Lockheed. The Complaint alleges that Cooper
owed the Lockheed executive a duty to keep that information
confidential and that the Lockheed executive expected that Cooper
would maintain the confidentiality of the information.
According to the Complaint, shortly after the August 22
therapy session ended, Cooper called Rottenberg and told him about
the impending announcement of a major transaction involving
Lockheed. The Complaint further alleges that Cooper and Rottenberg
then agreed that Rottenberg would open a brokerage account and they
would jointly purchase September 70 series Lockheed call option
contracts and share in the anticipated profits. The Complaint
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. MERVYN COOPER and KENNETH E. ROTTENBERG, Civil Action
The Securities and Exchange Commission today announced the filing of a Complaint in the
had agreed to merge.
Simultaneously with the filing of the Complaint, and without admitting or denying the
In addition, the Final Judgment against Cooper orders him to disgorge illegal profits of
The Complaint alleges that in August 1994 Cooper was providing marriage counseling to a
The Complaint states that, during a therapy session on the evening of August 22, 1994, the
The Complaint alleges that Cooper owed the Lockheed executive a duty to keep that information
According to the Complaint, shortly after the August 22 therapy session ended, Cooper called
The Complaint further alleges that Cooper and Rottenberg then agreed that Rottenberg would
The Complaint alleges that Cooper and Rottenberg also each purchased shares of Lockheed
That is, at the time of purchase, the call option contracts were set to expire in only three
On August 29, 1994, Lockheed and Martin Marietta jointly announced their intention to merge
As a result, the Complaint alleges that Cooper and Rottenberg earned total, combined illegal
The Commission seeks a permanent injunction against Rottenberg, disgorgement of unlawful
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