SEC v. Melvin, Case No. 1:12-cv-02984 (N.D. Ga.); SEC v. Berry, Case No. 1:12-cv-02985 (N.D. Ga.); SEC v. Coots, Case No. 1:12-cv-02986 (N.D. Ga.); SEC v. Jackson, Case No. 1:12-cv-02987 (N.D. Ga. Filed Aug. 28, 2012); SEC v. Rooks, Case No. 1:12-cv-02988 (N.D. Ga.).  On August 28, 2012, the SEC announced several insider trading cases against Georgia defendants.  They all relate to an accountant who tipped four friends who then furnished the inside information to others.  The information was related to a tender offer by a French pharmaceutical company.  In November 2009, the Chattem board members were informed that Sanofi had a serious interest in acquiring the company.  The next month one of its board members consulted with his personal accountant, defendant Thomas D. Melvin, Jr., about 50,000 Chattem options he held that would be automatically exercised if there was a change in the ownership of the company.  After learning about it, Mr. Melvin told four individuals about the deal.  Each one has been sued.  Each person tipped by Melvin also tipped at least one other person. 

The complaint against Melvin, Cain, Jinks and Doffing alleges violations of Exchange Act Sections 10(b) and 14(e). The case is pending.  Defendants Berry, Coots, and Rooks settled with the SEC by consented to the entry of a permanent injunction prohibiting future violations of Exchange Act Sections 10(b) and 14(e).  Mr. Jackson also settled, consenting to the entry of an injunction based on Exchange Act Section 10(b).  Each agreed to pay teh following disgorgement, prejudgment interest, and a penalty: Mr. Barry, $55,091.51 and a penalty in the same amount; Mr. Coots $17,360.51 and a penalty of $13,231.80; Mr. Jackson $2,369.78 and a penalty of $1,184.89; and Mr. Rooks $18,482.14 and a penalty of $4,620.54.  Mr. Rooks further agreed to be barred from appearing and practicing before the Commission as an accountant.