SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No. 17267 / December 12, 2001

Securities and Exchange Commission v. John Freeman, James Cooper, Benton Erskine, Anthony Seminara, Norman Lehrman, Linda Karlsen, Timothy Siemers, Norman Grossman, Lawrence Schwartz, Michael Akva, Robert Fricker, Richard Zelman, Bradley Burke, Benjamin Cooper, Chad L. Conner, Deon Benson, Gordon K. Allen, Jr., Jon Geibel, and William H. Borders II, 00 Civ. 1963 (VM) (Southern District of New York)

SEC SETTLES CLAIMS INVOLVING INSIDER TRADING AGAINST SIX DEFENDANTS

The Securities and Exchange Commission ("Commission") today announced that on December 7, 2001, the Honorable Victor Marrero of the United States District Court for the Southern District of New York entered individual Final Judgments of permanent injunction and other relief against defendants John Freeman ("Freeman") of Brooklyn, New York, Lawrence Schwartz ("Schwartz") of New York, New York, Anthony Seminara ("Seminara") of Long Beach, New York, Bradley Burke ("Burke") of New York, New York, Benton Erskine ("Erskine") of Charleston, West Virginia, and Benjamin Cooper ("Cooper") of Bowling Green, Kentucky. These judgments settle the Commission's claims against these six defendants in a civil action filed by the Commission on March 14, 2000, alleging that from 1997 through January 2000, these six defendants and others engaged in a widespread insider trading scheme that produced over $8 million in illegal profits from trading in the securities of 23 public companies.

At the time of the unlawful conduct alleged in the Complaint, Freeman was a part-time word processor who was assigned by the temporary agency where he worked to two Wall Street investment banking firms, Goldman Sachs & Co. Inc., and Credit Suisse First Boston Corporation. According to the Complaint, as a temporary employee at the two firms, Freeman was able to gain access to material nonpublic information regarding numerous merger and acquisition transactions. Freeman and two individuals he met in an Internet chat room, Erskine and James Cooper, launched the insider trading scheme. Erskine traded in advance of sixteen transactions. James Cooper tipped his brother, Benjamin Cooper, who traded in advance of fourteen transactions. Schwartz, a friend of Freeman and one of the most active traders, purchased securities in advance of twenty-two transactions. Seminara, a co-worker of Freeman, traded in advance of eight transactions. Burke, who worked with Freeman as a temporary employee at Credit Suisse, provided information he received at Credit Suisse to Freeman to pass to Freeman's network of tippees.

Without admitting or denying the allegations in the Complaint, the defendants consented to the entry of Final Judgments that permanently enjoin them from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and with the exception of Burke, violations of Section 14(e) of the Exchange Act and Rule 14e-3. Freeman was ordered to pay disgorgement in the amount of $3,734,795 with pre-judgment interest in the amount of $429,658.84, but payment was waived for the amount exceeding $22,000 based upon his sworn Statement of Financial Condition. Schwartz was ordered to pay disgorgement in the amount of $786,402 with pre-judgment interest in the amount of $97,689, and a civil penalty of $786,402 plus postjudgment interest within eighteen months. Burke was ordered to pay disgorgement in the amount of $345,066 with pre-judgment interest in the amount of $63,247.72, but payment of the full amount was waived based upon his sworn Statement of Financial Condition. Erskine was ordered to pay disgorgement in the amount of $363,464 with pre-judgment interest in the amount of $41,813.68, but payment was waived for the amount exceeding $25,000 based upon his sworn Statement of Financial Condition. Seminara was ordered to pay disgorgement in the amount of $40,748 with pre-judgment interest in the amount of $7,468.77, but payment was waived for the amount exceeding $25,000 based upon his sworn Statement of Financial Condition. Cooper was ordered to pay disgorgement in the amount of $149,623 with pre-judgment interest in the amount of $18,310.56, but payment was waived for the amount exceeding $11,000 based upon his sworn Statement of Financial Condition. Civil penalties were not imposed against defendants Freeman, Burke, Erskine, Seminara, and Cooper based upon each defendant's sworn Statement of Financial Condition. Each of the six defendants previously pleaded guilty in parallel criminal proceedings filed by the United States Attorney's Office for the Southern District of New York.