SEC v. Fiore J. Gallucci; Ronald A. Manzo; and Gary B. Taffet, No. LR-18746, Southern District of New York — Press Release
raw: Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet
Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet, No. LR-18746
Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet were charged by the SEC with insider tipping and trading in 1998–1999, after Gallucci misappropriated confidential merger information from his Skadden Arps-secretary wife and passed it to Manzo and Taffet, who traded and generated over $2.9 million in illegal profits through direct and indirect tippees.
The SEC alleged that Fiore J. Gallucci, a bond salesman, misappropriated nonpublic merger information from his wife, a secretary at Skadden Arps, despite promising not to disclose it, and passed it to Ronald A. Manzo, who traded on the tips and earned over $900,000 in illicit profits. Manzo then tipped Gary B. Taffet, who made approximately $247,000 in illegal gains, and both men disseminated the information to additional tippees, generating roughly $1.8 million in further illicit profits, for a total of over $2.9 million. The SEC charged all three with violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3, seeking disgorgement of all illegal profits with prejudgment interest, civil penalties, and permanent injunctions against future violations.
The SEC filed a complaint in 1999 alleging that Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet engaged in a multi-tiered insider tipping and trading scheme involving confidential merger information from 1998 to 1999. Gallucci, a bond salesman, obtained nonpublic details about target companies in contemplated business combinations from his wife, a secretary at Skadden Arps, who learned the information in the course of her employment—despite Gallucci’s explicit promise not to use or disclose it. He breached that promise by passing the information to his friend Manzo, an insurance company owner, who traded on the tips and realized over $900,000 in illegal profits. Manzo then tipped his associate Taffet, an insurance advisor with political ties, who generated approximately $247,000 in illicit gains. Both Manzo and Taffet further disseminated the information to additional tippees, whose trades produced roughly $1.8 million in additional illegal profits, bringing the total illicit gains to over $2.9 million. The SEC charged all three defendants with violations of Sections 10(b) and 14(e) of the Securities Exchange Act and Rules 10b-5 and 14e-3, seeking disgorgement of all illegal profits—including those of tippees—with prejudgment interest, civil penalties, and permanent injunctions against future securities law violations. The investigation remained open, with the SEC acknowledging cooperation from the NYSE, AMEX, and the U.S. Attorney’s Office for the Southern District of New York.
Exhibits & Attached Documents (1)
Extracted insights
- $1.80M $1.8 million $1M–$10M
- $900K $900,000 $100K–$1M
- $247K $247,000 $100K–$1M
- organization The Commission
- agency the securities and exchange commission
- The Securities and Exchange Commission filed a complaint in the United States District Court for the Southern District of New York
- The Commission alleges that Gallucci, Manzo, and Taffet engaged in insider tipping and trading
- Gallucci, Manzo, and Taffet engaged in insider tipping and trading involving securities of several companies
- the companies were targets of contemplated business combinations
The Securities and Exchange Commission ("Commission") today filed a complaint in the United States District Court for the Southern District of New York alleging that Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet engaged in repeated instances of insider tipping and trading involving the securities of several companies ahead of public announcements that the companies were targets in contemplated business combinations. The Commission alleges that Gallucci, Manzo, and Taffet, through their insider tipping and trading, each violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b 5 and 14e 3 thereunder. The Commission seeks a final judgment ordering the defendants to disgorge all illegal profits, including those of their tippees, with prejudgment interest thereon; imposing civil money penalties; and enjoining each of the defendants from future violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b 5 and 14e 3 thereunder. The Commission's complaint alleges that, at various times during 1998 and 1999, Gallucci, at the time a bond salesman, learned the identities of the target companies from his wife, a secretary for a senior mergers and acquisitions partner at the law firm of Skadden Arps Slate Meagher & Flom ("Skadden Arps") in New York. Skadden Arps represented a company in connection with each of these contemplated business combinations, and Gallucci's wife learned the target companies' identities in the course of her employment. The complaint alleges that she disclosed the information to Gallucci only after he expressly assured her that he would not disclose it to others or use it for trading purposes. The complaint also alleges that, although Gallucci himself did not trade on the basis of the information, he did misappropriate it from his wife by disclosing it and its source to Manzo, his long-time friend and owner of a New Jersey insurance company that did business with local government entities in New Jersey. Manzo purchased securities of the target companies, garnering illegal profits of more than $900,000. The complaint further alleges that, in addition, Manzo tipped a friend, Taffet, who was an owner of a company that provided insurance advice to local government entities in New Jersey and who had strong political ties in the state. Taffet purchased securities of several of the target companies, resulting in illegal profits of approximately $247,000. The complaint also alleges that Manzo and Taffet each tipped other individuals who themselves traded on the basis of those tips, and one of those individuals tipped two others, who also traded. The total additional illicit profits from these direct and indirect tippees is approximately $1.8 million. The Commission's investigation is continuing. The Commission acknowledges the assistance and cooperation of the New York Stock Exchange, the American Stock Exchange, and the Office of the United States Attorney for the Southern District of New York. SEC Complaint in this matterThe Securities and Exchange Commission ("Commission") today filed a complaint in the United States District Court for the Southern District of New York alleging that Fiore J. Gallucci, Ronald A. Manzo, and Gary B. Taffet engaged in repeated instances of insider tipping and trading involving the securities of several companies ahead of public announcements that the companies were targets in contemplated business combinations. The Commission alleges that Gallucci, Manzo, and Taffet, through their insider tipping and trading, each violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b 5 and 14e 3 thereunder. The Commission seeks a final judgment ordering the defendants to disgorge all illegal profits, including those of their tippees, with prejudgment interest thereon; imposing civil money penalties; and enjoining each of the defendants from future violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b 5 and 14e 3 thereunder. The Commission's complaint alleges that, at various times during 1998 and 1999, Gallucci, at the time a bond salesman, learned the identities of the target companies from his wife, a secretary for a senior mergers and acquisitions partner at the law firm of Skadden Arps Slate Meagher & Flom ("Skadden Arps") in New York. Skadden Arps represented a company in connection with each of these contemplated business combinations, and Gallucci's wife learned the target companies' identities in the course of her employment. The complaint alleges that she disclosed the information to Gallucci only after he expressly assured her that he would not disclose it to others or use it for trading purposes. The complaint also alleges that, although Gallucci himself did not trade on the basis of the information, he did misappropriate it from his wife by disclosing it and its source to Manzo, his long-time friend and owner of a New Jersey insurance company that did business with local government entities in New Jersey. Manzo purchased securities of the target companies, garnering illegal profits of more than $900,000. The complaint further alleges that, in addition, Manzo tipped a friend, Taffet, who was an owner of a company that provided insurance advice to local government entities in New Jersey and who had strong political ties in the state. Taffet purchased securities of several of the target companies, resulting in illegal profits of approximately $247,000. The complaint also alleges that Manzo and Taffet each tipped other individuals who themselves traded on the basis of those tips, and one of those individuals tipped two others, who also traded. The total additional illicit profits from these direct and indirect tippees is approximately $1.8 million. The Commission's investigation is continuing. The Commission acknowledges the assistance and cooperation of the New York Stock Exchange, the American Stock Exchange, and the Office of the United States Attorney for the Southern District of New York. SEC Complaint in this matter