UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17225 / November 8, 2001
Securities and Exchange Commission v. Joseph F. Doody IV, Joseph F.
Doody, and Diane C. Neiley, 01 Civ. 9879 (DC) (S.D.N.Y.)
SEC CHARGES THREE WITH INSIDER TRADING
The Securities and Exchange Commission today filed an injunctive
action in the United States District Court for the Southern District
of New York, alleging that Diane C. Neiley, a former employee of
BetzDearborn Inc., Joseph F. Doody IV (Doody), and his father, Joseph
F. Doody (Doody Sr.), engaged in illegal insider trading in advance of
the July 30, 1998 announcement that BetzDearborn Inc. and Hercules
Inc. had agreed to merge. The complaint alleges that Neiley, an
executive assistant at BetzDearborn, learned confidential information
regarding the merger and tipped her then-boyfriend, Doody, who in turn
tipped his father, Doody Sr. According to the complaint, Doody
purchased BetzDearborn common stock and call options that he sold
after merger announcement, realizing $240,953 in illegal profits. The
complaint alleges that after being tipped by his son, Doody Sr. bought
BetzDearborn common stock that he sold after the announcement for
unlawful profits of $30,813.
The complaint further alleges
* In June 1988, Neiley learned about the pending merger between
BetzDearborn and Hercules and then told Doody about the
negotiations. As Neiley learned about additional developments in
the merger negotiations, she passed the information on to Doody.
* Before the merger announcement, Doody purchased 425 shares of
BetzDearborn common stock and 100 call options. These purchases
concentrated approximately 94% of Doody's liquid assets
(approximately $22,300 of $23,800) in BetzDearborn securities.
* After Doody tipped his father Doody Sr. with secret information
about BetzDearborn's merger plans, Doody Sr. bought 1,000 shares
of BetzDearborn common stock for a cost of $37,625.
* On July 30, 1998, BetzDearborn and Hercules announced that they
agreed to merge and that Hercules would pay $72 per share for all
outstanding BetzDearborn shares. After the announcement,
BetzDearborn common stock opened at $68.25 per share, an increase
of $32.375, or approximately ninety percent (90%), over the prior
day's closing price.
* After the July 30, 1998 announcement, Doody sold his BetzDearborn
securities for an illegal profit of $240,953, and Doody Sr. sold
his BetzDearborn shares for an illegal profit of $30,813.
Doody, age 33, Doody Sr., age 56, and Neiley are residents of
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17225 / November 8,
Securities and Exchange Commission v. Joseph F. Doody IV, Joseph F. Doody, and Diane C.
SEC CHARGES THREE WITH INSIDER TRADING
The Securities and Exchange Commission today filed an injunctive action in the United States
The complaint alleges that Neiley, an executive assistant at BetzDearborn, learned
According to the complaint, Doody purchased BetzDearborn common stock and call options that
bought BetzDearborn common stock that he sold after the announcement for unlawful profits of
The complaint further alleges * In June 1988, Neiley learned about the pending merger between
Doody purchased 425 shares of BetzDearborn common stock and 100 call options.
* After the July 30, 1998 announcement, Doody sold his BetzDearborn securities for an illegal
Doody, age 33, Doody Sr., age 56, and Neiley are residents of Pennsylvania.
During 1998, Doody was an employee of a registered broker-dealer, investment adviser, and
The Commission alleges that as a result of the conduct described above, Doody, Doody Sr., and
In its action, the Commission is seeking permanent injunctions, disgorgement of the illegal
The United States Attorney for the Southern District of New York today announced criminal
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