SEC Charges Brothers Leslie Jacobs II and Andrew Jacobs in Eighth Insider Trading Case Related to Sanofi-Aventis’ of Chattem

SEC v. Jacobs, Case No. 1:13-cv-1289 (N.D. Ohio).  On June 11, 2013, the SEC announced it filed insider trading charges against Andrew W. Jacobs (“A. Jacobs”) and Leslie J. Jacobs II (“L. Jacobs”).  The SEC alleges that when French pharmaceutical company Sanofi-Aventis (“Sanofi”) announced its intent to make a tender offer for Chattem, a distributor of over-the-counter pharmaceutical products, shares of Chattem closed 32.60% higher on the day of the announcement.  According to the SEC, A. Jacobs learned about the tender offer from his brother-in-law, who was an executive at Chattem.  Although A. Jacobs promised to keep the information confidential, the SEC alleges that he called his brother L. Jacobs and told him about the deal.  L. Jacobs bought Chattem stock and sold it for a profit after the deal was publicly announced.  The Jacobs brothers are both charged with violating Sections 10(b) and 14(e) of the Exchange Act and Exchange Act Rules
10b-5 and 14e-3.  The SEC seeks injunctive relief, disgorgement, and civil monetary penalties.  The SEC also seeks an officer and director against A. Jacobs, who was an executive at a public company at the time of the tip.  This is the SEC’s eighth insider trading case related to the Chattem acquisition.

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