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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMMISSION SECURITIES FATHER INTELEFILM STOCK ALLEGES COMPLAINT INTERNET-BASED PRODUCT MINNESOTA TRADING EXCHANGE COMMISSION PROFITS PURCHASE DEVELOPER DEFENDANTS INJUNCTIONS EMPLOYEE CHARGES CIVIL MATTER CONNECTION NASD ASSISTANCE COMMISSION STAFF CIVIL PENALTIES PREJUDGMENT ILL-GOTTEN TRADING PROFITS DISGORGEMENT PERMANENT INJUNCTIONS SECURITIES EXCHANGE ACT |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17940 / January 16, 2003
Civil Action No. 03-863 JMR/FLN (D. Minn.)
SEC CHARGES FORMER AT&T EMPLOYEE AND ASSOCIATE WITH INSIDER TRADING
The Securities and Exchange Commission today filed an injunctive
action against Phong Nguyen, of Bloomington, Minnesota, and Chanh
Nguyen, of Chanhassen, Minnesota, alleging that the defendants traded
on confidential information regarding an Internet-based product
developed by AT&T Corporation and iNTELEFILM Corporation. iNTELEFILM,
headquartered in Eden Prairie, Minnesota, is a service provider for
the television commercial production industry. In August 2002,
iNTELEFILM filed for Chapter 11 bankruptcy.
The Commission's complaint alleges that in 1999 Phong Nguyen was
employed as an emerging markets developer for AT&T and was working
directly with iNTELEFILM to develop an Internet-based product,
Intelesource.org. Chanh Nguyen, a close friend of Phong Nguyen, worked
for Business Integration Services-an agent of AT&T that was procuring
computer hardware for Intelesource.org. While working on the
Intelesource.org project, Phong and Chanh Nguyen learned that
iNTELEFILM planned to publicly announce Intelesource.org on December
8, 1999. In the five trading days immediately before the announcement,
Phong and Chanh Nguyen purchased 76,000 shares of iNTELEFILM stock.
They profited by over $200,000 when the price of iNTELEFILM stock more
than doubled immediately after the announcement. The complaint also
alleges that Chanh Nguyen illegally tipped his father to purchase
iNTELEFILM stock, which his father did two days before the
announcement. The complaint does not allege, however, that Chanh
Nguyen's father acted illegally.
The Commission charges the defendants with securities fraud in
violation of Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5. The Commission seeks permanent injunctions, disgorgement
of ill-gotten trading profits, prejudgment interest and civil
penalties.
The Commission staff acknowledges the assistance of NASD in connection
with this matter.
_________________________________________________________________
Modified 01/27/2003
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