SEC and Stephen H. Guth Settle Insider Trading Charges Concerning Omrix Tender Offer

SEC v. Stephen H. Guth, Case No. 1:12-cv-00842 (RBW) (D.D.C.).   On May 24, 2012 the SEC filed a settled civil enforcement action against Stephen H. Guth for buying Omrix Biopharmaceuticals, Inc. common stock ahead of a public announcement that Johnson & Johnson was making a tender offer for the outstanding shares of Omrix stock.  In October and November 2008, Guth received an unsolicited communication from the CEO of Omrix seeking information related to his tenure at Omrix.  Guth knew the sender of the email was the CEO of Omrix and knew the information was nonpublic.  As a result of various communications, Guth learned of a likely acquisition of Omrix and therefore purchased 7,000 shares of common stock. After the public announcement of Johnson & Johnson’s tender offer, Guth sold his shares of Omrix stock, earning profits of more than $60,000.

Without admitting or denying the charges, Guth consented to entry of a judgment enjoining him from future violations of Section 14(e) of the Exchange Act and Rule 14e-3, ordering him to disgorge $63,517 plus prejudgment interest, and pay a civil monetary penalty of $31,758.

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