SEC Press press_release 8 KB 4,529 chars

SEC Charges Eight More In Reebok Insider Trading Case

Release: 2005-117
Caption: Securities and Exchange Commission v. Amended Complaint, et al.

summary

The SEC charged eight individuals, including Sonja Anticevic and her nephew David Pajcin, with insider trading in Reebok securities ahead of its August 3, 2005, acquisition by adidas-Salomon AG, generating over $6 million in illegal profits through coordinated domestic and offshore trades, leading to court-ordered asset freezes and demands for disgorgement and civil penalties.

paragraph

The SEC charged eight individuals—Sonja Anticevic, David Pajcin, Henry Siegel, Monika Vujovic, Elvis Santana, Zoran Sormaz, Perica Lopandic, and Ilija Borac—with insider trading in Reebok International Ltd. securities prior to its August 3, 2005, acquisition announcement by adidas-Salomon AG. The defendants collectively earned over $6 million in illicit profits by purchasing 4,097 out-of-the-money call options in U.S. accounts and 145,240 shares of common stock in foreign accounts (Croatia, Germany, Austria) just before the news broke, then liquidating all positions immediately after. The SEC alleged violations of Section 10(b) and Rule 10b-5, seeking permanent injunctions, disgorgement of all profits, civil penalties, and successfully obtained court orders freezing over $6 million in domestic and offshore assets, including repatriation of funds from foreign brokers.

narrative

The SEC charged eight individuals—Sonja Anticevic, her nephew David Pajcin, Henry Siegel, Monika Vujovic, Elvis Santana, Zoran Sormaz, Perica Lopandic, and Ilija Borac—with insider trading in Reebok International Ltd. securities ahead of its August 3, 2005, acquisition announcement by adidas-Salomon AG. Using nonpublic information, the defendants coordinated trades across domestic U.S. accounts and offshore accounts in Croatia, Germany, and Austria, purchasing 4,097 out-of-the-money Reebok call options and 145,240 shares of common stock in the two days before the announcement, then selling all positions immediately after the public disclosure. Pajcin, a former broker, allegedly tipped others and directed trades, while Anticevic played a central role in orchestrating both domestic and foreign transactions. Collectively, these trades generated over $6 million in illegal profits: $4 million from U.S. options trading and over $2 million from foreign stock purchases, including a $2 million trade through an Austrian broker, Direktanlage.at AG. The SEC alleged violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5, and obtained emergency court orders freezing all domestic assets and requiring repatriation and freezing of foreign proceeds to prevent dissipation. A preliminary injunction was issued against Anticevic, continuing the asset freeze, while the SEC seeks permanent injunctions, full disgorgement of all illicit gains, and civil monetary penalties. The case also revealed overlapping suspicious trades in other companies’ securities during the same period, suggesting a broader pattern of coordinated insider trading.

Enriched metadata

Scheme: insider-trading (100%)
Court: Southern District of New York
Victim loss: $6,000,000

Classified insider-trading(confidence 100%). EDGAR detection: forms 4/3/5/144· recall 81% / precision 19%. detection rule →

Extracted insights

Dollar amounts 4

$6.00M $6 Million $1M–$10M
$6.00M $6 million $1M–$10M
$4.00M $4 million $1M–$10M
$2.00M $2 million $1M–$10M

Entities 5

person amended complaint
scheme_term eight more in reebok insider trading case
person mark k. schonfeld
scheme_term more than $6 million in illicit gains related to the insider trading
court united states district court

Triples 30

Sec Charge Eight More In Reebok Insider Trading Case
Court Issue Emergency Orders Freezing or Ordering the Repatriation of More than $6 Million
Sec Identify More than $6 Million In Illicit Gains Related to the Insider Trading
United States District Court Issue Temporary Restraining Orders That Freeze the Proceeds of Trading In Reebok Securities In the Domestic Accounts
United States District Court Require the Repatriation and Freezing of the Proceeds In the Foreign Accounts
Mark K. Schonfeld Say Once Again, We Have Taken Immediate Action to Prevent the Dissipation of Ill-Gotten Profits Both Within and Outside the United States
Sec Obtain a Court Order Freezing a Securities Account In the Name of Sonja Anticevic
Court Enter a Preliminary Injunction Against Anticevic Which Continues the Asset Freeze
Sec File an Amended Complaint Charging Eight Other Defendants, Including Anticevic's Nephew, David Pajcin of Clifton, N.J.
Amended Complaint Allege That Pajcin, a Former Broker, Placed or Directed Some of the Reebok Trades
Amended Complaint Allege That Pajcin Tipped Other Defendants Who Placed Reebok Trades
Commission Allege That the Defendants Acted In Concert or Under a Common Direction In Placing the Reebok Trades
Commission Allege That the Defendants Collectively Netted a Profit of Over $6 Million
Commission Charge Henry Siegel, a Resident of Pomona, N.Y.
Commission Charge Monika Vujovic, a Resident of New York, N.Y.
Commission Charge Elvis Santana, a Resident of Brooklyn, N.Y.
Commission Charge Zoran Sormaz, a Resident of Zagreb, Croatia.
Commission Charge Perica Lopandic, a Resident of Reinbek, Germany.
Commission Charge Ilija Borac, a Resident of Zagreb, Croatia.
Commission Charge Certain Unknown Persons Trading In an Account at an Austrian Broker, Direktanlage.at Ag.
Amended Complaint State On August 1 and 2, Through Four Domestic Accounts, Anticevic, Siegel, Vujovic, and Santana Purchased a Total of 4,097 Reebok 'Out of the Money' Call Options
Amended Complaint State That These Accounts Comprised Nearly 80% of the Buy Volume In Reebok Call Options On Those Days
Amended Complaint State That All Positions In Each Account Were Liquidated After the Acquisition Announcement On August 3
Amended Complaint State That the Domestic Trading Netted Profits Exceeding $4 Million
Amended Complaint State On Those Same Days, Through Foreign Accounts Maintained at the Same Broker, Anticevic, Sormaz, Lopandic and Borac Purchased the Equivalent of 145,240 Shares of Reebok Common Stock
Amended Complaint State That Each of Those Accounts Sold All of Its Reebok Shares On August 3
Amended Complaint State On August 2, an Account Maintained at an Austrian Broker, Direktanlage, Purchased 7,545 Shares of Reebok Common Stock, Which Were Also Sold On August 3
Amended Complaint State That the Proceeds From the Foreign Trading In Reebok Shares Was More Than $2 Million
Amended Complaint State That Overlapping Trades Were Placed at the Same Time In Both the Domestic and Foreign Accounts In the Securities of Other Companies
Commission Allege That the Defendants Engaged in Illegal Insider Trading In Violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5

View original SEC press releasesec.gov

Extracted body text (4,529c)

SEC CHARGES EIGHT MORE IN REEBOK INSIDER TRADING CASE FOR IMMEDIATE RELEASE 2005-117 Court Issues Emergency Orders Freezing or Ordering the Repatriation of More than $6 Million Washington, D.C., Aug. 18, 2005 - In a second emergency action alleging insider trading in the securities of Reebok International Ltd. (Reebok), the Securities and Exchange Commission today charged eight additional individuals who reaped illegal profits. The Commission has now identified more than $6 million in illicit gains related to the insider trading. The illegal trading took place in domestic and offshore brokerage accounts held by residents of the U.S., Croatia and Germany, the Commission alleged. Acting on the Commission's request, the United States District Court for the Southern District of New York today issued temporary restraining orders that freeze the proceeds of trading in Reebok securities in the domestic accounts and require the repatriation and freezing of the proceeds in the foreign accounts. Mark K. Schonfeld, the Director of the Commission's Northeast Regional Office, said, "Once again, we have taken immediate action to prevent the dissipation of ill-gotten profits both within and outside the United States. This will preserve the proceeds of the trading pending resolution of this case." On August 5, the Commission obtained a court order freezing a securities account in the name of Sonja Anticevic, a Croatian national and resident, in which a series of highly profitable and timely trades of "out of the money" Reebok call options occurred in the two days prior to an August 3 announcement that Reebok had agreed to be acquired by adidas-Salomon AG. Today, the Court entered a Preliminary Injunction against Anticevic which, among other relief, continues the asset freeze. Today, the Commission also filed an amended complaint charging eight other defendants, including Anticevic's nephew, David Pajcin of Clifton, N.J. The amended complaint alleges that Pajcin, a former broker, placed or directed some of the Reebok trades, and tipped other defendants who placed Reebok trades. The Commission also alleges that the defendants acted in concert or under a common direction in placing the Reebok trades, and collectively netted a profit of over $6 million. Also charged were: Henry Siegel, a resident of Pomona, N.Y. Monika Vujovic, a resident of New York, N.Y. Elvis Santana, a resident of Brooklyn, N.Y. Zoran Sormaz , a resident of Zagreb, Croatia. Perica Lopandic, a resident of Reinbek, Germany. Ilija Borac, a resident of Zagreb, Croatia. Certain Unknown Persons trading in an account at an Austrian broker, Direktanlage.at AG. According to the Commission's amended complaint, on August 1 and 2, through four domestic accounts, Anticevic, Siegel, Vujovic, and Santana purchased a total of 4,097 Reebok "out of the money" call options. Collectively, these accounts comprised nearly 80% of the buy volume in Reebok call options on those days. All positions in each account were liquidated after the acquisition announcement on August 3. In total, the domestic trading netted profits exceeding $4 million. On those same days, through foreign accounts maintained at the same broker, Anticevic, Sormaz, Lopandic and Borac purchased the equivalent of 145,240 shares of Reebok common stock. Each of those accounts sold all of its Reebok shares on August 3. On August 2, an account maintained at an Austrian broker, Direktanlage, purchased 7,545 shares of Reebok common stock, which were also sold on August 3. Collectively, the proceeds from the foreign trading in Reebok shares was more than $2 million. In addition to the Reebok trading, overlapping trades were placed at the same time in both the domestic and foreign accounts in the securities of other companies. As a result of the defendants' conduct, the Commission alleges that the defendants engaged in illegal insider trading in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Among other things, the Complaint seeks permanent injunctive relief, the disgorgement of all illegal profits, and the imposition of civil monetary penalties. See also: Litigation Release For further information contact: Mark K. Schonfeld Director, Northeast Regional Office 212-336-1020 David Rosenfeld Associate Regional Director, Northeast Regional Office 212-336-0153 David A. Markowitz Assistant Regional Director, Northeast Regional Office 212-336-0128 http://www.sec.gov/news/press/2005-117.htm Home | Previous Page Modified: 08/18/2005

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