U.S. Securities and Exchange Commission
Litigation Rel. No. 18080 / April 10, 2003
SEC Charges Former Director of Massachusetts Bank and His Friend in Settled
Insider Trading Case
The Commission today filed a settled civil fraud action against
Geoffrey E. Fitts of Framingham, Massachusetts, and William D. Fabri,
Sr., of Ipswich, Massachusetts, alleging that they engaged in illegal
insider trading in the stock of MetroWest Bank, formerly a
publicly-traded Massachusetts bank. According to the Commission's
complaint, in May 2001, Fitts, then a director of MetroWest, tipped
his friend Fabri that MetroWest was going to be acquired. Fabri
thereafter purchased MetroWest stock prior to the public announcement
in June 2001 that Banknorth Group, Inc. would acquire MetroWest.
Without admitting or denying the Commission's allegations, Fitts and
Fabri consented to the entry of final judgments permanently enjoining
them from violating the antifraud provisions of the federal securities
laws. Fitts also agreed to pay $14,800 in civil penalties and to be
barred from serving as an officer or director of any publicly-traded
company. Fabri consented to pay a total of approximately $25,000 in
disgorgement, prejudgment interest, and civil penalties.
The Commission's complaint alleges that Fitts learned at a MetroWest
board of directors meeting on May 16, 2001 of MetroWest's plans to be
acquired. According to the Commission's complaint, Fitts passed this
information on to Fabri during a telephone call on May 21. That day,
Fabri wrote a $20,000 check from his bank account to his brokerage
account to finance the purchase of MetroWest shares. The Commission's
complaint alleges that Fitts and Fabri then spent much of the next day
together, during which time they further discussed the impending
takeover of MetroWest. On May 23, Fabri purchased 3,000 shares of
MetroWest. Between May 21 and May 25, Fabri also caused another
individual to purchase 325 shares of MetroWest. On June 11, Banknorth
announced its plans to acquire MetroWest, causing MetroWest's stock
price to rise. According to the Commission's complaint, through his
insider trading, Fabri profited by $10,710, and the other individual
profited by $1,130.
The Commission's complaint alleges that Fitts breached his fiduciary
duty to MetroWest and its shareholders by disclosing to Fabri the
material, nonpublic information concerning MetroWest's acquisition,
and that Fabri profited from buying MetroWest stock, and caused
another person to purchase the stock, while Fabri was in possession of
the material, nonpublic information. In its complaint, the Commission
charged Fitts and Fabri with violations of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, based on
SNIPPETS:
U.S. Securities and Exchange Commission
SEC Charges Former Director of Massachusetts Bank and His Friend in Settled Insider Trading
According to the Commission's complaint, in May 2001, Fitts, then a director of MetroWest,
Fabri thereafter purchased MetroWest stock prior to the public announcement in June 2001 that
Without admitting or denying the Commission's allegations, Fitts and Fabri consented to the
Fitts also agreed to pay $14,800 in civil penalties and to be barred from serving as an
Fabri consented to pay a total of approximately $25,000 in disgorgement, prejudgment
The Commission's complaint alleges that Fitts learned at a MetroWest board of directors
That day, Fabri wrote a $20,000 check from his bank account to his brokerage account to
The Commission's complaint alleges that Fitts and Fabri then spent much of the next day
The Commission's complaint alleges that Fitts breached his fiduciary duty to MetroWest and
In addition, Fitts has consented to pay a civil penalty in an amount equal to 1.25 times the
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