U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19190 / April 19, 2005
Securities and Exchange Commission v. Alina Welt, Andrew M. Welt, Bruce A. Welt and Bruce Hirschhorn, U.S.D.C. for the District of Columbia, Civil Action No. 1:05CV00783 (JR)
SEC SUES BENEFITS ADVISER, THREE OTHERS FOR INSIDER TRADING IN FIVE SECURITIES; DEFENDANTS TO PAY $1.27 MILLION IN SETTLEMENT
The Securities and Exchange Commission today announced the filing of a settled civil action against Alina and Andrew Welt, of Deerfield Beach, Florida, Bruce Welt, of Gainesville, Florida and Bruce Hirschhorn, of Boonton, New Jersey. The Commission charged the defendants with engaging in insider trading in the securities of five companies over an eighteen month period.
The complaint alleges that, while Alina Welt was working as a benefits analyst for two large public accounting firms, she learned confidential information relating to acquisitions or tender offers for publicly traded corporations involving her employers' clients. The complaint alleges further that, on at least five different occasions between December 1999 and August 2001, Alina Welt tipped her husband, Andrew Welt, to proposed confidential transactions, and in turn, Andrew Welt tipped a friend, Bruce Hirschhorn and his brother, Bruce Welt. The five target companies were Renex Corp., Travel Services International, Inc., Intermedia Communications, Inc., Digex, Inc. and Sensormatic Electronics Corp. Bruce Hirschhorn purchased the securities of all five possible targets, Bruce Welt purchased the securities of four of the possible targets, and Andrew Welt purchased the securities of one of the possible target companies. According to the complaint, the defendants realized nearly $400,000 in illegal profits from their trading.
Prior to filing, all of the defendants consented, without admitting or denying the allegations of the complaint, to final judgments which permanently enjoin them from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Bruce Hirschhorn further consented to disgorge trading profits of $367,581.00, and to pay prejudgment interest of $97,669.07 and a civil penalty of $367,581.00. Bruce Welt consented to disgorge trading profits of $17,250.50, and to pay prejudgment interest of $4,023.95 and a civil penalty of $17,250.50. Alina and Andrew Welt consented to disgorge trading profits of $8,812.50, and to pay prejudgment interest of $3,311.50 and civil penalties totaling $393,669.00. The total payments of the defendants will be $1,277,148.62. In addition, Andrew Welt, who was an investment adviser registered with the state of Florida during the relevant time, consented to the issuance of a Commission order which will bar him from association with any investment adviser.
SEC Complaint in this matter
http://www.sec.gov/litigation/litreleases/lr19190.htm
