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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 14731 / November 27, 1995
SECURITIES AND EXCHANGE COMMISSION v. WILLIAM J. RAUWERDINK,
United States District Court for the Southern District of New
York, Civil Action No. 95 Civ 9974 (HB).
The Securities and Exchange Commission (the "Commission")
brought an insider trading case today against William J.
Rauwerdink, the former Treasurer, Executive Vice President, and
Chief Financial Officer of MEDSTAT Group, Inc. ("Medstat"), in a
Complaint filed today in the United States District Court for the
Southern District of New York. The Commission's Complaint
alleges that Rauwerdink purchased Medstat common stock through
Medstat's 401(k) plan while in possession of material nonpublic
information about The Thomson Corporation's ("Thomson's") planned
tender offer for Medstat. The complaint seeks a permanent
injunction against future violations of sections 10(b) and 14(e)
of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3
thereunder, and an order requiring Rauwerdink to disgorge his
illegal trading profits of $109,284.50 plus prejudgment interest,
and a civil penalty pursuant to the Insider Trading Sanctions Act
of 1984. Simultaneously with the filing of the Complaint,
Rauwerdink, without admitting or denying any of the allegations
in the Complaint, consented to the entry of an order enjoining
him from violating Sections 10(b) and 14(e) of the Securities
Exchange Act of 1934, and Rules 10b-5 and 14e-3 thereunder, and
requiring him to disgorge his illegal trading profits and pay
prejudgment interest and a civil penalty of $109,284.50.
The Complaint alleges that by July 1994, a Thomson
subsidiary began discussing, among other things, a possible
acquisition of Medstat with Medstat senior management, including
Rauwerdink. Such discussions occurred at times throughout the
summer. On September 29, the CEO of a Thomson subsidiary met
Medstat's chairman and specifically proposed that Medstat
consider a Thomson tender offer. At a meeting on October 13 that
Rauwerdink attended, that same Thomson official expressed
Thomson's interest in acquiring Medstat and the parties discussed
a specific valuation range for the acquisition. Discussions
continued favorably, and on Wednesday, November 16, Thomson and
Medstat publicly announced the tender offer.
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. WILLIAM J. RAUWERDINK, United States District Court for
York, Civil Action No. 95 Civ 9974.
The Commission's Complaint alleges that Rauwerdink purchased Medstat common stock through
The complaint seeks a permanent injunction against future violations of sections 10and 14of
The Complaint alleges that by July 1994, a Thomson subsidiary began discussing, among other
At a meeting on October 13 that Rauwerdink attended, that same Thomson official expressed
The Complaint alleges that in early 1994, Rauwerdink participated in discussions with
As a result of these discussions, in May 1994, Medstat updated its insider trading guidelines
According to the Complaint, on October 17, 1994, while in possession of material nonpublic
The Complaint further alleges that on November 4, 1994, the Plan trustee bought 9,503 shares
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