NEW YORK -(Dow Jones)- A Manhattan father and son, who both worked in the securities industry, have agreed to settle insider-trading allegations by the Securities and Exchange Commission in connection with several PIPEs transactions.
In a press release, the regulator said Elliot Joel Smith, 75 years old, and his son Gregg Ashley Smith, 37, have agreed, without admitting or denying wrongdoing, to be held jointly and severably liable for the disgorgement of $ 204,476 plus prejudgment interest of $72,511.48.
Elliott Smith, who was employed as a managing director at Broadband Capital Management, also agreed to pay a civil penalty of $408,952, while Gregg Smith, a former Banc of America Securities LLC investment banker, agreed to pay $204,476 in civil penalties.
The SEC alleged that Gregg Smith, while working at the Bank of America Corp. (NYSE:BAC) ( BAC) unit, tipped his father between December 2001 and December 2002 about material nonpublic information about Aspen Technology Inc. (NASDAQ-NMS:AZPN) (AZPN), Regeneration Technologies Inc. (NASDAQ-NMS:RTIX) (RTIX) and Triangle Pharmaceuticals Inc. while coordinating private investment in public equities, or PIPE, offerings for each company.
The elder Smith, a founding member and director of the Chicago Board of Options Exchange from 1972 to 1975, purchased shares in each company through accounts he controlled in the names of his spouse or one or more of three entities he controlled based on that information, the SEC said.
As a result, Elliott Smith gained more than $204,476 in ill-gotten gains, the SEC said.
Elliott Smith, with his son's assistance, also allegedly created fraudulent documents that the elder Smith provided to the SEC's staff in order to mislead them as to the reason for his trades in two of the companies.
A lawyer for Gregg Smith declined comment late Thursday, while a lawyer for Elliott Smith didn't immediately return a phone call seeking comment late Thursday.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
(END) Dow Jones Newswires 09-27-07 1807 Copyright (c) 2007 Dow Jones & Company, Inc.
