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U.S. Securities and Exchange Commission

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK


SECURITIES AND EXCHANGE COMMISSION,     
Plaintiff,
 
v. COMPLAINT
 
JOHN FREEMAN, 00 Civ. 1963 (VM) (Southern District of New York)
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,  
 
Defendants.  

Plaintiff Securities and Exchange Commission ("the Commission") alleges:

NATURE OF THE ACTION

1. This case involves an insider trading scheme that was launched in cyberspace. In mid-1997, defendants John Freeman, James Cooper and Benton Erskine "met" in an internet chat room devoted to the performance of a stock in which all three had invested and lost money. In the course of their on-line communications, Freeman informed James Cooper and Erskine that he worked at Goldman Sachs & Co., Inc. ("Goldman Sachs"), a major international investment bank headquartered in New York. The three then agreed upon a plan to profit from any inside information Freeman could garner about merger and acquisition transactions being planned by Goldman Sachs' clients. During the next two years, Freeman and his tippees -- who came to include a number of Freeman's friends, neighbors and co-workers -- developed one of the most extensive illegal trading networks ever uncovered by law enforcement authorities. The defendants' scheme grew to involve insider trading in the securities of over 20 different companies by dozens of individuals, who reaped illegal profits in excess of $8 million. Four of the defendants are either principals or employees of firms that are registered with the Commission as broker-dealers.

2. From approximately October 1996 to January 6, 2000, Freeman was employed in the Composition Department of Philip Morris Companies, Inc. ("Philip Morris") in New York City. During the same period, Freeman also worked at a variety of temporary jobs. As an employee of Custom Staffing Inc. ("Custom"), a temporary employment agency, Freeman was assigned to work at Goldman Sachs from May 1997 to June 1998. At Goldman Sachs, Freeman was able to gain access to a wealth of material nonpublic information regarding numerous merger and acquisition transactions planned by clients of Goldman Sachs. After leaving Goldman Sachs, Freeman was assigned by Custom to a temporary word processing position at Credit Suisse First Boston Corporation ("CS First Boston") which, like Goldman Sachs, is a major international investment bank headquartered in New York. While working at CS First Boston from October 1998 to January 2000, Freeman was able to gain access to highly confidential nonpublic information regarding many upcoming merger and acquisition transactions involving the firm's clients.

3. Freeman had never met either James Cooper or Erskine before he began communicating with them via the internet in mid-1997. In fact, to this day, Freeman has never had a face-to-face meeting with James Cooper. Nonetheless, on many occasions, Freeman passed material nonpublic information to James Cooper and Erskine regarding merger and acquisition transactions on which either Goldman Sachs or CS First Boston was working. Freeman often passed such information to James Cooper and Erskine by using private chat rooms and instant messaging capabilities of America On-Line ("AOL"). In return, James Cooper and Erskine paid Freeman a portion of their trading profits.

4. James Cooper purchased securities in at least 16 companies that were the subject of merger and acquisition transactions Freeman learned about while working at Goldman Sachs and CS First Boston, and realized trading profits of over $227,000. Erskine traded in the securities of companies involved in at least 16 of the deals, and reaped profits of more than $273,000.

5. Freeman also tipped material nonpublic information he obtained from Goldman Sachs and/or CS First Boston to (a) three of his co-workers at Philip Morris, defendants Anthony Seminara, Norman Lehrman and Linda Karlsen, (b) two individuals he had met while working as a waiter at the Les Halles restaurant in New York City, defendants Timothy Siemers and Norman Grossman, and (c) three friends and neighbors, defendants Lawrence Schwartz, Michael Akva, and Richard Zelman.

6. Freeman's three co-workers at Philip Morris made profits totaling over $344,000, while the two Les Halles traders reaped profits of over $730,000. The three friends and neighbors generated profits of over $1,127,000, with Schwartz's trading alone accounting for approximately $822,000 of those profits.

7. Many of Freeman's tippees agreed to pay Freeman for his tips. Their payments took many forms. In some instances, cash was enclosed in unsigned birthday cards sent to Freeman in envelopes bearing no return addresses. In other instances, checks were sent to third parties who cashed them and funneled the money to Freeman. One tippee disguised his payment as a "loan" to a friend of Freeman, who then repaid the loan to Freeman. One tippee gave Freeman a cash card so that Freeman could withdraw money from the tippee's bank account himself. Finally, one tippee paid Freeman in cases of wine.

8. Many of Freeman's tippees passed the inside information along to others. For example, Akva tipped defendant Robert Fricker, who realized trading profits of at least $946,000. Similarly, James Cooper, a resident of Bowling Green, Kentucky, tipped at least three individuals, including (a) defendant Chad Conner, a stockbroker who works at the Bowling Green office of Morgan Keegan & Company, Inc. ("Morgan Keegan"), (b) defendant Deon Benson, a dentist who lives in Bowling Green, and (c) defendant Benjamin Cooper, who is James Cooper's brother and resides in Bowling Green.

9. Chad Conner, in turn, caused at least five of his clients to trade. One of Conner's clients made profits of over $2,118,000 dollars through trades involving nine of the deals to which Conner was tipped. Conner also tipped a friend, defendant Gordon Allen. Allen, a principal of G2 Investments, Inc., a broker-dealer located in Nashville, Tennessee, made profits of over $415,000 by trading on tips on at least 13 deals. Allen, in turn, tipped a colleague at G2 Investments, Inc., defendant Jon Geibel, who made over $94,000 in profits by trading on inside information in at least seven deals. Allen and Geibel made additional purchases in accounts they jointly controlled, from which they realized profits of over $377,000.

10. In addition, Conner tipped defendant William Borders, the branch manager of the Morgan Keegan office where Conner was employed. Borders, a First Vice President at Morgan Keegan, received tips from both Conner and Deon Benson, who was one of Border's clients. Borders used the inside information he received from Conner and Benson to trade for his own account and reaped profits of more than $84,000.

11. By engaging in insider trading as described herein, all of the defendants violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]. In addition, certain of the defendants violated Section 14(e) of the Exchange Act [15 U.S.C. 78n(e)] and Rule 14e-3 thereunder [17 C.F.R. 240.14e-3] by trading on inside information relating to securities for which tender offers were made. The SEC seeks injunctive relief, disgorgement, civil penalties and other appropriate relief with respect to each of the defendants.

JURISDICTION

12. This Court has jurisdiction over this action pursuant to Sections 21(d) and (e), Section 21A and Section 27 of the Exchange Act [15 U.S.C. 78u(d) and (e), 78u-1 and 78aa].

13. Defendants, directly or indirectly, made use of the means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national securities exchange in connection with the transactions, acts, practices and courses of business alleged herein.

14. Unless restrained and enjoined by this Court, defendants will continue to engage in acts, practices, and transactions similar to those described herein.

DEFENDANTS

15. John Freeman, age 34, resides in Brooklyn, New York. From approximately October 1996 to January 6, 2000, Freeman was employed as a full time graphic artist in the Composition Department of Philip Morris. Since late 1995 to the present, Freeman has been registered as a temporary employee with Custom, a temporary employment agency located in Manhattan that provides word processing services to various clients. From May 1997 to June 1998, Freeman was assigned by Custom to work at a temporary word processing position at Goldman Sachs. From October 1998 to January 2000, Freeman was assigned by Custom to work at a temporary word processing position at CS First Boston.

16. James Cooper, age 41, resides in Bowling Green, Kentucky. Cooper is an insurance agent.

17. Benton Erskine, age 39, resides in Charleston, West Virginia. Erskine is the Vice President of Data Tech, a laser printing company in Charleston, West Virginia.

18. Anthony Seminara, age 47, resides in Long Beach, New York. Seminara is a full time employee in the Composition Department of Philip Morris.

19. Norman Lehrman, age 42, resides in Tallman, New York. Lehrman was formerly employed as a manager of the company which provides the dining services for Philip Morris.

20. Linda Karlsen, age 46, resides in Brooklyn, New York. Karlsen is a full time employee of Philip Morris.

21. Timothy Siemers, age 33, resides in New York, New York. Timothy Siemers is a waiter at Les Halles Restaurant.

22. Norman Grossman, age 54, resides in Long Island City, New York. Grossman is a retired New York City school teacher.

23. Michael Akva resides in Flushing, New York. Akva is a car salesman.

24. Lawrence Schwartz, age 59, resides in New York, New York. Schwartz is the owner of L&M Larjo Construction Company.

25. Richard Zelman, age 32, resides in Nyack, New York. Zelman is self-employed.

26. Robert Fricker, age 46, resides in Kew Gardens Hills, New York. Fricker owns a construction company.

27. Bradley Burke, age 38, resides in New York, New York. Burke is registered as a temporary employee with Custom, which sends Burke on varying temporary assignments. From October 1998 to approximately March 2000, Burke had a temporary word processing assignment at CS First Boston.

28. Benjamin Cooper, age 35, resides in Bowling Green, Kentucky. Benjamin Cooper is an insurance agent.

29. Chad Conner, age 35, resides in Bowling Green, Kentucky. Conner is employed as a stockbroker at the Bowling Green office of Morgan Keegan.

30. Deon Benson, age 41, resides in Smiths Grove, Kentucky. Benson is employed as a dentist.

31. Gordon Allen, age 35, resides in Bowling Green, Kentucky. Allen is a principal of G2 Investments, Inc., a registered broker-dealer.

32. Jon Geibel, age 29, resides in Nashville, Tennessee. Geibel is a principal of G2 Investments, Inc., a registered broker-dealer.

33. William Borders, age 37, resides in Bowling Green, Kentucky. Borders is First Vice President and Branch Manager of the Bowling Green, Kentucky branch of the brokerage firm of Morgan Keegan.

OTHER RELEVANT ENTITIES

34. Goldman Sachs & Co., Inc. is the investment banking subsidiary of Goldman Sachs Group, Inc. The Goldman Sachs Group, Inc. is a global investment banking and securities firm specializing in investment banking, trading and principal investments, and asset management and securities services. The various businesses of Goldman Sachs operate in North and South America, Europe, Africa, Australia and Asia. Goldman Sachs is headquartered in New York, New York.

35. Credit Suisse First Boston Corporation is the investment banking subsidiary of Credit Suisse Group, and provides investment banking services throughout the world, including in New York, New York.

36. Morgan Keegan & Company, Inc. is a broker-dealer registered with the Commission pursuant to Section 15 of the Exchange Act. The brokerage firm is headquartered in Memphis, Tennessee, and has branch offices in various locations, including Bowling Green, Kentucky. Morgan Keegan is a subsidiary of Morgan Keegan, Inc.

37. G2 Investments, Inc. is a broker-dealer registered with the Commission pursuant to Section 15 of the Exchange Act. The firm is headquartered in Nashville, Tennessee. The firm was formerly known as Conquest Investments, Inc.

COMPANIES WHOSE SECURITIES WERE TRADED
BY THE DEFENDANTS BASED ON INSIDE INFORMATION

38. One or more of the defendants purchased securities of each of the 23 companies listed below based on inside information. Each company was the subject of a merger or acquisition transaction in which either Goldman Sachs or CS First Boston provided investment banking advice, financing or underwriting services. Each company is described as it existed just prior to the merger or acquisition transaction on which Goldman Sachs or CS First Boston worked:

(a) Oregon Metallurgical Corporation ("OREM") was an Oregon corporation headquartered in Albany, Oregon. The common stock of OREM was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on the National Market System of the Nasdaq Stock Market, Inc. ("NASDAQ"). OREM's options were traded on the Chicago Board Options Exchange ("CBOE");

(b) Lukens, Inc. ("Lukens") was a Delaware corporation headquartered in Coatesville, Pennsylvania. The common stock of Lukens was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the New York Stock Exchange, Inc. ("NYSE"). Lukens's options were traded on the Pacific Exchange, Inc.;

(c) Sano Corporation ("Sano") was a Florida corporation headquartered in Miramar, Florida. The common stock of Sano was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ;

(d) USF&G Corporation ("USF&G") was a Maryland corporation headquartered in Baltimore, Maryland. The common stock of USF&G was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. USF&G's options were traded on the Philadelphia Stock Exchange;

(e) Regal Cinemas, Inc. ("Regal") was a Tennessee corporation headquartered in Knoxville, Tennessee. The common stock of Regal was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ;

(f) Illinois Central Railroad Co. ("Illinois Central") was a Delaware corporation headquartered in Chicago, Illinois. The common stock of Illinois Central was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. Illinois Central's options were traded on the Philadelphia Stock Exchange;

(g) Coherent Communications Systems Corporation ("Coherent") was a Delaware corporation headquartered in Leesburg, Virginia. The common stock of Coherent was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ. Coherent's options were traded on the American Stock Exchange ("AMEX");

(h) Baker Hughes, Inc. ("Baker Hughes") was a Delaware corporation headquartered in Houston, Texas. The common stock of Baker Hughes was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. Baker Hughes' options were traded on the Pacific Exchange, Inc.;

(i) CIENA Corporation ("CIENA") was a Delaware corporation headquartered in Linthicum, Maryland. The common stock of CIENA was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ. CIENA's options were traded on the CBOE;

(j) DSC Communications Corp. ("DSC") was a Delaware corporation headquartered in Plano, Texas. The common stock of DSC was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ. DSC's options were traded on the AMEX;

(k) Camco International, Inc. ("Camco") was a Delaware corporation headquartered in Houston, Texas. The common stock of Camco was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. Camco's options were traded on the Philadelphia Stock Exchange;

(l) Getchell Gold Corp. ("Getchell") was a Nevada corporation headquartered in Englewood, Colorado. The common stock of Getchell was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on the AMEX. Getchell's options were traded on the Philadelphia Stock Exchange;

(m) United States Satellite Broadcasting Company ("USSB") was a Minnesota corporation headquartered in Minneapolis, Minnesota. The common stock of USSB was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ. USSB's options were traded on the CBOE;

(n) SmarTalk Teleservices, Inc. ("SmarTalk") was a California corporation headquartered in Dublin, Ohio. The common stock of SmarTalk was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ;

(o) Fingerhut Companies ("Fingerhut") was a Minnesota corporation headquartered in Minneapolis, Minnesota. The common stock of Fingerhut was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. Fingerhut's options were traded on the CBOE;

(p) Mercantile Bancorporation, Inc. ("Mercantile") was a Missouri corporation headquartered in St. Louis, Missouri. The common stock of Mercantile was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. Mercantile's options were traded on the AMEX;

(q) Wang Laboratories ("Wang") was a Massachusetts corporation headquartered in Billerica, Massachussetts. The common stock of Wang was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ. Wang's options were traded on the CBOE;

(r) Cogeneration Corporation of America ("CogenAmerica") was a Minnesota corporation headquartered in Minneapolis, Minnesota. The common stock of CogenAmerica was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ;

(s) RailTex Inc. ("RailTex") was a Texas corporation headquartered in San Antonio, Texas. The common stock of RailTex was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ. RailTex's options were traded on the Philadelphia Stock Exchange;

(t) Medco Research, Inc. ("Medco") was a North Carolina corporation headquartered in Research Triangle Park, North Carolina. The common stock of Medco was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE. Medco's options were traded on the AMEX;

(u) Splitrock Services, Inc. ("Splitrock") was a Texas corporation headquartered in Woodlands, Texas. The common stock of Splitrock was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on NASDAQ;

(v) Cameron Ashley Building Products, Inc. ("CAB") was a Texas corporation headquartered in Dallas, Texas. The common stock of CAB was registered with the Commission pursuant to Section 12(b) of the Exchange Act and was traded on the NYSE; and

(w) Jason, Inc. ("Jason") was a Wisconsin corporation headquartered in Milwaukee, Wisconsin. The common stock of Jason was registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on the NASDAQ.

FIRST CLAIM FOR RELIEF

Violations of Section 10(b) of
the Exchange Act [I5 U.S.C. 78j(b)]
And Rule 10b-5 [17 C.F.R. 240.10b-5])

39. Paragraphs 1 through 38 are realleged and incorporated herein by reference.

Freeman Misappropriated Material Nonpublic
Information Concerning At Least 23 Acquisition Transactions

Freeman's Duties to Goldman Sachs and its Clients

40. Freeman's job at Goldman Sachs involved performing word processing, formatting, and graphics work on documents generated by Goldman Sachs. Through his work in the word processing department at Goldman Sachs, Freeman had access to confidential, material and nonpublic information of Goldman Sachs and its clients.

41. Some of the documents on which Freeman was assigned to work contained confidential information about transactions contemplated by clients of Goldman Sachs. Thus, Freeman obtained certain material nonpublic information regarding Goldman Sachs investment banking matters through work to which he was assigned. On occasion, Freeman assisted co-workers in completing their assignments. By doing so, Freeman obtained confidential information about additional transactions.

42. Freeman also accessed material nonpublic information contained on Goldman Sachs' computer system relating to transactions on which Freeman performed no work. Freeman learned additional nonpublic information by reviewing confidential documents he found at printers or copiers.

43. In these various ways, Freeman acquired material nonpublic information concerning each of the merger, acquisition, and tender offer transactions described below (the "Goldman Sachs Deals") in which Goldman Sachs provided financial services and advice to the clients listed below (the "Goldman Sachs Clients"):

GOLDMAN SACHS CLIENT TARGET OR OFFEROR ANNOUNCEMENT ANNOUNCEMENT DATE DEAL
REFERRED TO AS:
Allegheny Teledyne Oregon Metallurgical Allegheny Teledyne agreed to acquire Oregon Metallurgical. 10/31/97 The Oregon Metallurgical Deal
Allegheny Teledyne Lukens, Inc. Bethlehem Steel announces it has submitted a bid to acquire Lukens; Allegheny Teledyne submitted a rival bid on 12/22/97. 12/15/97 The Lukens Deal
Elan Corporation Plc. Sano Corporation Elan agreed to buy Sano Corp in a stock swap valued at $375 million. 12/15/97 The Sano Deal
USF&G Corporation St. Paul, Corp. St. Paul Corp. said it will acquire USF&G for $3.5 billion in stock & debt. 01/19/98 The USF&G Deal
Regal Cinemas, Inc. Hicks, Muse and KKR Hicks, Muse and KKR agreed to buy Regal Cinemas for $1.5 billion. 01/20/98 The Regal Deal
Canadian National Railway Illinois Central Railroad Canadian National Railway agreed to buy Illinois Central for $3 billion in cash, stock and debt. 02/10/98 The Illinois Central Deal
Tellabs Coherent Communica-tions Systems, Corp. Tellabs agreed to acquire Coherent for $670 million. 02/16/98 The Coherent Deal
Schlumberger Baker Hughes, Inc. Schlumberger will bid to buy Baker Hughes. 04/16/98 The Baker Hughes Deal
Ciena, Corp. Tellabs Tellabs to acquire Ciena. 06/03/98 The Ciena Deal
DSC Communications Alcatel Alcatel to acquire DSC Communications for $4.4 billion. 06/04/98 The DSC Deal
Schlumberger Camco International Schlumberger to acquire Camco for $3.13 billion. 06/19/98 The Camco Deal

44. Freeman owed fiduciary or similar duties of trust and confidence to both Goldman Sachs and its clients, which required that he maintain the confidentiality of all material nonpublic information about potential and actual business transactions involving the Goldman Sachs Clients.

45. On or about May 1, 1997, Freeman acknowledged in writing that he read and understood Goldman Sachs' policy statement entitled Guidelines For Investment Banking Division Regarding the Chinese Wall, Inter-Divisional Communications, and Personnel Trading, dated March 1995 ("Guidelines"). The Guidelines provide that Freeman was prohibited from disclosing to third parties confidential or proprietary information obtained from Goldman Sachs.

46. In addition, on or about November 7, 1997, Freeman signed a Non-Disclosure Agreement in which he agreed not to disclose to third parties confidential, nonpublic or proprietary information.

Freeman's Duties to CS First Boston and its Clients

47. Freeman's job at CS First Boston involved performing word processing, formatting, and graphics work on documents generated by CS First Boston. Through his work in the word processing department at CS First Boston, Freeman had access to confidential, material and nonpublic information of CS First Boston and its clients.

48. Some of the documents on which Freeman was assigned to work contained confidential information about transactions contemplated by clients of CS First Boston. Thus, Freeman obtained certain material nonpublic information regarding CS First Boston investment banking matters through work to which he was assigned. On occasion, Freeman assisted co-workers in completing their assignments. By doing so, Freeman obtained confidential information about additional transactions.

49. Freeman also accessed material nonpublic information contained on CS First Boston's computer system relating to transactions on which Freeman performed no work. In particular, Freeman obtained confidential information from internal CS First Boston documents he found on the CS First Boston computer system called "Heads Up Memoranda," which CS First Boston circulated to its investment banking personnel informing them of upcoming merger or acquisition projects to which they would be assigned. Freeman learned additional nonpublic information by reviewing confidential documents he found at printers or copiers. Freeman also obtained confidential information from another temporary employee of Custom assigned to work at CS First Boston, defendant Bradley Burke.

50. In these various ways, Freeman acquired material nonpublic information concerning each of the merger, acquisition, and tender offer transactions described below (the "CS First Boston Deals"), in which CS First Boston provided financial services and advice to the clients listed below (the "CS First Boston Clients"):

CS FIRST BOSTON CLIENT TARGET OR OFFEROR ANNOUNCEMENT ANNOUNCEMENT DATE DEAL
REFERRED TO AS:
Placer Dome Getchell Gold Placer Dome agreed to acquire Getchell Gold 12/13/98 The Getchell Deal
U.S. Satellite Broadcasting Hughes Electronics Hughes agreed to acquire U.S. Satellite. 12/14/98 The USSB Deal
SmarTalk Teleservices, Inc. AT&T SmarTalk signed a definitive agreement to sell substantially all of its assets to AT&T for up to $192.5 million. 01/19/99 The SmarTalk Deal
Federated Department Stores, Inc. Fingerhut Co's. Federated agreed to buy Fingerhut for about $1.7 billion in cash and assumed debt. 02/11/99 The Fingerhut Deal
Firstar Corporation Mercantile Bancorporation, Inc. Firstar agrees to acquire Mercantile through an exchange of shares valued at $10.6 billion. 04/30/99 The Mercantile Deal
Wang Laboratories Inc. (doing business as Wang Global) Getronics NV Getronics agreed to buy Wang Global for $1.8 billion in cash. Getronics will make a tender offer at $29.25 per share. 05/04/99 The Wang Deal
Calpine Corp. Cogeneration Corporation of America. Calpine Corp. to acquire 80% interest in Cogeneration Corp. for $145 million. 08/27/99 The Cogeneration Deal
RailAmerica, Inc. RailTex Inc. RailAmerica to acquire RailTex, creating world's largest short line regional freight railroad operator. 10/14/99 The RailTex Deal
King Pharmaceuticals Medco Research Inc. King Pharmaceuticals announces it has signed a definitive agreement with Medco Research Inc. to merge. 12/01/99 The Medco Deal
Splitrock Services, Inc. McLeodUSA, Inc. McLeodUSA to acquire Splitrock in $2.1 Billion Stock Transaction. 1/7/2000 The Splitrock Deal.
Cameron Ashley Building Products, Inc. (Special Committee of independent directors) CGW Southeast Partners IV, LP and Cameron Ashley senior management Cameron signed a definitive agreement to be acquired by an investment group, consisting of CGW 1/18/2000 The Cameron Ashley Deal
Group including management of Jason, Inc. Jason Inc. Group including Jason Inc. management announces $335 million buyout of Jason Inc. 1/31/2000 The Jason Deal

51. Freeman owed fiduciary or similar duties of trust and confidence to both CS First Boston and its clients, which required that he maintain the confidentiality of all material nonpublic information about potential and actual business transactions involving the CS First Boston Clients.

52. Many of the CS First Boston documents from which Freeman derived inside information contained legends clearly identifying the documents as "confidential." Freeman recognized that his job responsibilities required him to maintain the confidentiality of all information concerning proposed merger and acquisition transactions involving the CS First Boston Clients.

Freeman's Breaches of Duty

53. In breach of his duties to Goldman Sachs, the Goldman Sachs Clients, CS First Boston, the CS First Boston Clients, and Custom, Freeman communicated material nonpublic information regarding each of the Goldman Sachs Deals and each of the CS First Boston Deals to one or more of James Cooper, Erskine, Seminara, Lehrman, Karlsen, Siemers, Grossman, Schwartz, Akva, Fricker and Zelman ( the "Freeman Tippees"), as described in detail below.

54. Freeman's tips to the Freeman Tippees regarding the contemplated merger and acquisition transactions typically included information such as the name and/or stock symbol of the issuer whose securities the Freeman Tippees should purchase, the nature of the anticipated transaction, and the likely time frame for the completion of the transaction.

55. In tipping each of the Freeman Tippees, Freeman acted for his own benefit. Each of the Freeman Tippees, except Karlsen, agreed to pay Freeman in return for his tips and, with the exception of Karlsen, each did in fact provide compensation to Freeman after receiving tips from him. Freeman provided his tips to Karlsen as gifts.

56. Freeman knew or was reckless in not knowing that the information he communicated to each of the Freeman Tippees regarding each of the Goldman Sachs Deals and each of the CS First Boston Deals was nonpublic and that his communication of that information to them was improper and in breach of duties Freeman owed to his employers and their clients. Freeman knew or was reckless in not knowing that each of the Freeman Tippees would either (1) effect transactions in the securities of the companies to be acquired in each of the Goldman Sachs Deals and in each of the CS First Boston deals to which he tipped them or (2) disclose the information to others who were likely to effect such transactions.

Freeman's Tips Via the Internet Lead to
Massive Trading Centered in Bowling Green, Kentucky

Freeman Tips James Cooper

57. In mid-1997, Freeman, James Cooper and Erskine met in an AOL chat room devoted to the performance of the stock of the "Headstrong Group" -- in which all three had invested and lost money. During a subsequent chat room discussion involving Freeman, Erskine and James Cooper, Freeman informed the chat room participants that he worked at Goldman Sachs.

58. After he informed the chat room participants that he worked at Goldman Sachs, Freeman, James Cooper, Erskine and another individual began to "meet" on AOL in a private chat room from which, under AOL protocol, they could exclude other on-line participants. In this private chat room, Freeman offered to provide tips on Goldman Sachs merger and acquisition deals in return for a share of the trading profits. It was eventually agreed among Freeman, James Cooper and Erskine that Freeman would provide confidential information concerning transactions planned by clients of Goldman Sachs in exchange for 10 percent of the profits realized from purchases of securities by James Cooper and Erskine made on the basis of Freeman's tips.

59. Pursuant to this arrangement, Freeman provided material nonpublic information to James Cooper and Erskine for over two years.

60. During the course of his employment with both Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to James Cooper regarding at least 16 transactions planned by clients of those firms.

61. All tips provided to James Cooper were communicated by Freeman to James Cooper as pending deals being worked on by a major investment bank which were not yet public and as to which the purchase of securities was potentially profitable.

62. James Cooper maintained three brokerage accounts in his name.

63. Following tips from Freeman, James Cooper purchased in at least two of those accounts securities of the following 16 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Sano, USF&G, Regal, Illinois Central, Coherent, Baker Hughes, DSC, Camco, Getchell, USSB, SmarTalk, Fingerhut, Mercantile, RailTex, and Medco. From those trades, James Cooper realized trading profits of at least $227,192. The purchases that James Cooper made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 39 of Exhibit A hereto, which is a compendium of the relevant purchases identified to date in the accounts identified to date.

64. In exchange for Freeman's tips, Cooper sent Freeman cash payments totaling between $2500 to $4000 contained in birthday cards.

65. Freeman and James Cooper took various steps to avoid detection. They agreed to maintain all their communications over the internet, using private chat rooms and instant messaging capabilities of America On-Line internet services. Cooper knew when to send Freeman instant messages because Freeman and Cooper were on each other's "Buddy Lists, " and thus Cooper could determine when Freeman was on-line. In addition, in their internet communications, their references to the inside information being communicated were disguised. For example, on occasions when Freeman was providing a stock ticker symbol, he would make up the name of a person whose initials were the same as the ticker symbol and send a message to James Cooper containing the full name of the fictitious person. In other instances, Freeman and James Cooper would use code names to reference the transactions contemplated by clients of either Goldman Sachs or CS First Boston.

66. To further avoid detection, James Cooper and Freeman agreed that all payments to Freeman would be made in cash using the U.S. mails. The payments were sent in birthday cards to Freeman's office at Philip Morris. Neither the cards nor the envelopes contained signatures, return addresses, or other markings identifying the sender as James Cooper. James Cooper informed Freeman over the internet when a payment for information was enroute. For example, Cooper would send Freeman an internet message stating, "I'm sending you something for your birthday." Shortly thereafter, Freeman would receive a birthday card in the mail containing cash.

67. In the early part of the period during which he bought stock, Cooper often purchased options, rather than common stock, in order to achieve greater returns from the limited funds he had available to trade. However, after defendant Chad Conner warned James Cooper that frequent successful trading in options might appear suspicious, James Cooper decided to confine his trading to common stock. In order to be in a position to obtain the level of profits he had realized previously through his options trading, James Cooper sought bank loans. Defendant Chad Conner assisted James Cooper in obtaining these loans. At Conner's request, a client of Conner (who is referred to herein as Unnamed Trader No. 2) guaranteed a bank loan extended to James and Benjamin Cooper on more than one occasion, despite the fact that Unnamed Trader No.2 had never met either of the Coopers.

Freeman Tips Benton Erskine

68. Initially, Freeman and Erskine maintained all of their communications over the internet, using private chat rooms and instant messaging capabilities. Later, Freeman and Erskine began to speak over the telephone on close to a daily basis to discuss confidential information Freeman was obtaining regarding potential transactions involving clients of Freeman's employers.

69. The original agreement between Freeman and Erskine provided that Freeman would receive 10 percent of Erskine's profits from purchases of securities based on inside information supplied by Freeman. However, Erskine and Freeman later agreed that Erskine alone would trade on their behalf in two accounts held in Erskine's name, and that any resulting profits would be divided in half.

70. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Erskine regarding at least 16 transactions planned by clients of those firms.

71. Erskine traded, after he received tips from Freeman, in: (i) three brokerage accounts maintained in Erskine's own name and (ii) one brokerage account maintained in the name of his mother, over which he held discretionary trading authority (collectively, the "Erskine Accounts"). In addition, on at least one occasion, Erskine had James Cooper purchase options on Erskine's behalf in James Cooper's brokerage account because Erskine's brokerage account did not have options capability at that time.

72. Following tips from Freeman, Erskine purchased in Erskine Accounts securities of the following 16 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Lukens, USF&G, Illinois Central, Coherent, DSC, Camco, Getchell, USSB, SmarTalk, Fingerhut, Mercantile, Wang, RailTex, Medco and Splitrock. From those trades, Erskine realized trading profits of at least $273,514. Erskine made additional profits from options purchased in James Cooper's account on Erskine's behalf. The purchases that Erskine made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 46 of Exhibit A hereto.

73. In exchange for Freeman's tips, Erskine sent Freeman payments of more than $19,000. Erskine did not tell Freeman about the profits realized in his mother's account and Freeman did not share in those profits.

74. To avoid detection, when Freeman and Erskine discussed their insider trading scheme, code names were used to reference the transactions planned by clients of either Goldman Sachs or CS First Boston. The decision to trade in accounts held only in Erskine's name was another attempt to conceal the insider trading scheme.

75. To further avoid detection, all payments of Freeman's portion of the trading profits were sent by Federal Express to Freeman's office at Philip Morris. Payments were made in the form of checks made out to either Freeman or to "Cash." On some occasions, Freeman would cash the checks. On other occasions, the checks would be cashed by defendant Anthony Seminara, a Philip Morris co-worker and one of the Freeman Tippees. After cashing the checks, Seminara gave the proceeds to Freeman.

76. On another occasion, payment was made by Erskine to Freeman as follows: Freeman informed Erskine that Freeman's friend, Anthony Seminara, needed a $10,000 loan to purchase a car. Then, Erskine wrote a $10,000 check to Seminara which identified the payment as a "loan" in the memorandum section of the check. Seminara cashed the check. Seminara and Freeman then opened a bank account in Seminara's name to which Freeman was given a cash card. Seminara and Freeman agreed that Seminara would place $250 per month over a period of years in the account to repay the $10,000 to Freeman. Freeman and Erskine understood that the $10,000 was actually Freeman's payment for his tips to Erskine. Thus, Erskine did not receive a repayment of the $10,000 from either Seminara or Freeman. On another occasion, Erskine sent Freeman a payment written on Erskine's business account for Data Tech bearing the words "web design" in the memorandum section of the check. Freeman never performed web design work for Erskine's company.

James Cooper Tips Chad Conner

77. James Cooper tipped Chad Conner, a stockbroker who works at the Bowling Green, Kentucky office of Morgan Keegan, to much of the material nonpublic information James Cooper received from Freeman. At or about the time Freeman began providing inside information to James Cooper, James Cooper told Conner of his arrangement with Freeman and further informed Conner of the nature and source of the material nonpublic information that Freeman had agreed to provide. As James Cooper received additional tips from Freeman, he provided the majority of them to Conner, who told James Cooper to keep the source of the tips "happy."

78. Conner maintained a brokerage account in his name.

79. Following tips from James Cooper, Conner purchased in his account securities of Medco in advance of the public announcement that the company was involved in a merger and acquisition transaction. From his trading, Conner realized trading profits of at least $2,752. The purchase that Conner made while in possession of material nonpublic information provided by James Cooper is described in greater detail at page 34 of Exhibit A hereto.

James Cooper Tips Benjamin Cooper

80. James Cooper tipped his brother, Benjamin Cooper, to much of the material nonpublic information James Cooper received from Freeman. On occasion, Benjamin Cooper had direct contact with Freeman over the internet, while Benjamin Cooper was using James Cooper's instant messaging capabilities.

81. Benjamin Cooper maintained two brokerage accounts in his name.

82. Following tips from James Cooper, Benjamin Cooper purchased in those accounts securities of the following 14 companies in advance of public announcements that the companies were to be acquired: OREM, USF&G, Regal, Illinois Central, Coherent, Baker Hughes, DSC, Camco, SmarTalk, Fingerhut, Mercantile, CogenAmerica, RailTex, and Medco. From those trades, Benjamin Cooper realized trading profits of at least $149,623. The purchases that Benjamin Cooper made while in possession of material nonpublic information provided by James Cooper are set forth in detail at page 35 of Exhibit A hereto.

James Cooper Tips Deon Benson

83. James Cooper tipped Deon Benson, a Bowling Green dentist, to much of the material nonpublic information James Cooper received from Freeman. James Cooper told Benson that the information came from an individual who worked at Goldman Sachs. Although Freeman did not have direct contact with Benson, Freeman and James Cooper discussed Benson's trading on the confidential information initially provided by Freeman. James Cooper told Freeman that he was providing inside information to Benson.

84. Benson traded, after he received tips from James Cooper, in (i) five brokerage accounts maintained in Benson's own name and (ii) one brokerage account held in his father's name over which Deon Benson had discretionary authority.

85. Following tips from James Cooper, Benson purchased in those accounts securities of the following 10 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: USF&G, Regal, Illinois Central, Coherent, Baker Hughes, DSC, Camco, USSB, Mercantile, and Medco. From those trades, Benson realized trading profits of at least $838,982. The purchases that Benson made while in possession of material nonpublic information provided by James Cooper are set forth in detail at page 12 of Exhibit A hereto.

James Cooper Causes a Friend to Benefit Through Trades Based on Inside Information

86. James Cooper caused a friend, who is a former Bowling Green resident ("Unnamed Trader No. 1"), to purchase securities of the following eight companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Sano, Illinois Central, Coherent, Baker Hughes, USSB, Mercantile and Medco. From those trades, Unnamed Trader No. 1 realized trading profits of at least $60,125. The purchases that Unnamed Trader No. 1 made are set forth in detail at page 66 of Exhibit A hereto.

87. James Cooper caused Unnamed Trader No. 1 to trade either by tipping Unnamed Trader No. 1 to inside information or recommending that Unnamed Trader No. 1 purchase the securities in question without indicating that the recommendations were based upon inside information. By virtue of having caused trading in Unnamed Trader No. 1's account, James Cooper is responsible to disgorge the profits realized through the trading.

Chad Conner Tips Gordon Allen

88. Conner tipped Allen, a Bowling Green resident and a principal of G2 Investments, Inc., a broker-dealer located in Nashville, Tennessee, to much of the material nonpublic information Conner received from James Cooper. Conner told Allen that the information came from an individual who worked at Goldman Sachs.

89. Allen maintained at least six brokerage accounts in his name. Allen also held trading authority over two additional accounts not maintained in his name.

90. Following tips from Conner, Allen purchased in those accounts securities of the following 13 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Lukens, USF&G, Regal, Illinois Central, Coherent, Baker Hughes, DSC, Camco, Getchell, USSB, Mercantile, and Medco. From those trades, trading profits of at least $415,135 were realized. The purchases that Allen made in those accounts while in possession of material nonpublic information provided by Conner are set forth in detail at page 3 of Exhibit A hereto.

91. Allen and defendant Geibel jointly controlled accounts in the name of Blue Horseshoe Investments and Conquest Capital.

92. Following tips from Conner, Allen and Geibel purchased in the Blue Horseshoe accounts securities of the following 10 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, USF&G, Illinois Central, Coherent, DSC, Camco, USSB, Fingerhut, Mercantile, and Railtex. From those trades, Allen and Geibel realized trading profits of at least $271,385. The purchases that Allen and Geibel made through Blue Horseshoe while in possession of material nonpublic information provided by Conner are set forth in detail at page 9 of Exhibit A hereto.

93. Following tips from Conner, Allen and Geibel purchased in the Conquest Capital account securities of Coherent in advance of the public announcement that the company was involved in a merger and acquisition transaction. From that trading, Allen and Geibel realized trading profits of at least $106,012. The purchases that Allen and Geibel made through Conquest Capital while in possession of material nonpublic information provided by Conner are set forth in detail at page 9 of Exhibit A hereto.

Chad Conner Causes Five Clients to Benefit Through Trades Based on Inside Information

94. Conner caused five clients, all Bowling Green residents ("Unnamed Traders No. 2 through 6"), to purchase securities of several companies in advance of public announcements that the companies were to be acquired. Unnamed Trader No. 2 realized profits of at least $2,118,658 by trading in securities involved in nine deals. Unnamed Trader No. 3, who is an attorney, realized profits of at least $159,594 by trading in securities involved in eight deals. Unnamed Trader No. 4, a close friend of Conner, realized profits of at least $372,276 by trading in securities involved in 16 deals. Unnamed Traders No. 5 and 6, who are relatives of Unnamed Trader No. 4, realized profits of at least $17,894 and $17,438, by trading in securities involved in six and three deals, respectively. The purchases that Unnamed Traders Nos. 2 through 6 made are set forth in detail at pages 51, 63, 21, 29 and 31, respectively, of Exhibit A hereto.

95. Conner caused trading in accounts of each of Unnamed Traders Nos. 2 through 6 either by (a) tipping one or more of Unnamed Traders Nos. 2 through 6 to inside information, (b) recommending that one or more of Unnamed Traders Nos. 2 through 6 purchase the securities in question without indicating that the recommendations were based upon inside information or (c) deciding himself to make the purchases for one or more of Unnamed Traders Nos. 2 through 6's accounts. By virtue of having caused trading in the accounts of each of Unnamed Traders Nos. 2 through 6, Conner is responsible to disgorge the profits realized through that trading.

Chad Conner Tips William Borders

96. Conner also tipped Borders, who is First Vice President and Branch Manager of the Bowling Green, Kentucky branch of the brokerage firm of Morgan Keegan, to much of the material nonpublic information Conner received from James Cooper.

Deon Benson Tips William Borders

97. Borders also received tips from Benson, his brokerage client. Benson tipped Borders, to much of the material nonpublic information Benson received from James Cooper. Benson told Borders that the information came from an individual who worked at Goldman Sachs.

98. Borders maintained two accounts in his name.

99. Following tips from Conner and Benson, Borders purchased in that account securities of the following seven companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Lukens, USF&G, Regal, DSC, Camco, and Mercantile. From those trades, Borders realized trading profits of at least $84,150. The purchases that Borders made while in possession of material nonpublic information provided by Conner and Benson are set forth in detail at page 32 of Exhibit A hereto.

Gordon Allen Tips Jon Geibel

100. Allen tipped Geibel, another principal of the broker-dealer G2 Investments, Inc., to much of the material nonpublic information Allen received from Conner. Allen told Geibel that the information came from an individual who worked at Goldman Sachs.

101. Geibel traded, after he received tips from Allen, in two accounts in his name.

102. Following tips from Allen, Geibel purchased in those accounts securities of the following seven companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Illinois Central, Baker Hughes, Ciena, DSC, Camco, and Mercantile. From those trades, Geibel realized trading profits of at least $94,129. The purchases that Geibel made while in possession of material nonpublic information provided by Allen are set forth in detail at page 57 of Exhibit A hereto.

Gordon Allen and Jon Geibel Cause A Colleague to Benefit Through Trades Based on Inside Information

103. Allen and Geibel caused a friend and colleague, who is a Nashville, Tennessee resident ("Unnamed Trader No. 7"), to purchase securities of the following two companies in advance of public announcements that the companies were involved in merger and acquisition transactions: DSC and Getchell. From those trades, Unnamed Trader No. 7 realized trading profits of at least $47,188. The purchases that Unnamed Trader No. 7 made are set forth in detail at page 98 of Exhibit A hereto.

104. Allen and Geibel caused trading in Unnamed Trader No. 7's account either by tipping Unnamed Trader No. 7 to inside information or recommending that Unnamed Trader No. 7 purchase the securities in question without indicating that the recommendation was based upon inside information. By virtue of having caused trading in Unnamed Trader No. 7's account, Allen and Geibel are responsible to disgorge the profits realized through the trading.

Freeman's Tips to His Co-workers at Philip Morris

Freeman Tips Anthony Seminara

105. Freeman and Seminara were co-workers at Philip Morris and sat in the same office. As a result, Seminara heard many of the conversations between Freeman and his tippees regarding their insider trading. Freeman explained to Seminara that Freeman could obtain confidential information about potential transactions involving clients of Goldman Sachs.

106. Sometime in late 1997 or early 1998, Freeman and Seminara agreed that Freeman would provide Seminara with confidential information concerning transactions planned by clients of Goldman Sachs in exchange for 10 percent of the profits realized from purchases of securities made by Seminara on the basis of Freeman's tips. Freeman and Seminara also agreed that Seminara would offset any payments to Freeman by any losses sustained from inside information that did not produce trading profits. When Freeman joined CS First Boston in October 1998, their insider trading scheme continued, except Freeman provided confidential information concerning transactions planned by clients of CS First Boston.

107. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Seminara regarding at least eight transactions planned by clients of those firms.

108. Seminara traded, after he received tips from Freeman, in a brokerage account maintained in Seminara's name (the "Seminara Account"). On one occasion, Seminara purchased in the Seminara Account securities on behalf of Norman Lehrman, another co-worker and direct tippee of Freeman.

109. Following tips from Freeman, Seminara purchased in the Seminara Account securities of the following eight companies in advance of public announcements that the companies involved in merger and acquisition transactions: Sano, Illinois Central, Coherent, DSC, Camco, USSB, Fingerhut, and Mercantile. From those trades, Seminara realized trading profits of at least $42,032. The purchases that Seminara made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 85 of Exhibit A hereto.

110. In exchange for Freeman's tips, Seminara gave Freeman cash payments totaling between $1000 to $2000.

Freeman Tips Norman Lehrman

111. Freeman met Norman Lehrman while Freeman was working as an employee at Philip Morris. Lehrman was the manager of the food service company that provided cafeteria services to Philip Morris. Sometime in the Spring of 1998, Freeman informed Lehrman that Freeman could obtain confidential information regarding transactions involving clients of Goldman Sachs, Freeman's employer.

112. Freeman and Lehrman agreed that Freeman would provide Lehrman with confidential information concerning transactions planned by clients of Goldman Sachs in exchange for 10 percent of the profits realized from purchases of securities made by Lehrman on the basis of Freeman's tips. When Freeman joined CS First Boston in October 1998, their insider trading scheme continued, except Freeman provided confidential information concerning transactions planned by clients of CS First Boston.

113. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Lehrman regarding at least four transactions planned by clients of those firms.

114. Lehrman traded, after he received tips from Freeman, in a brokerage account maintained in Lehrman's name.

115. Following tips from Freeman, Lehrman purchased in this account securities of the following four companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Getchell, USSB, SmarTalk, and Fingerhut. From those trades, Lehrman realized trading profits of at least $110,026. The purchases that Lehrman made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 73 of Exhibit A hereto.

116. Due to the profits Lehrman obtained based on purchases made in the Seminara Account, Lehrman requested that Seminara give $3000 to Freeman. The $3000 represented Freeman's payment for Lehrman's profits from trading on inside information regarding the Getchell Gold Deal and the USSB Deal.

Freeman Tips Linda Karlsen

117. Freeman met Linda Karlsen while both were employed at Philip Morris. In either late 1997 or early 1998, Freeman informed Karlsen that he could obtain confidential information regarding transactions planned by clients of Goldman Sachs, Freeman's employer.

118. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Karlsen regarding at least 11 transactions planned by clients of those firms. Freeman provided the tips as gifts to Karlsen.

119. Karlsen maintained a brokerage account in her name.

120. Following tips from Freeman, Karlsen purchased in this account securities of the following 11 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Illinois Central, Coherent, Baker Hughes, DSC, Camco, Getchell, USSB, Fingerhut, Wang, RailTex, and Medco. From those trades, Karlsen realized trading profits of at least $192,633. The purchases that Karlsen made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 70 of Exhibit A hereto.

Freeman Tips Two Individuals He Met at Les Halles

Freeman Tips Timothy Siemers

121. Freeman and Timothy Siemers met while both were employed as waiters at Les Halles Restaurant. Around late 1997, Freeman informed Timothy Siemers that Freeman could obtain confidential information regarding transactions planned by clients of Goldman Sachs.

122. At or about that time, Freeman and Timothy Siemers agreed that Freeman would provide Timothy Siemers with confidential information concerning transactions planned by clients of Goldman Sachs in exchange for 10 percent of the profits realized from purchases of securities made by Timothy Siemers on the basis of Freeman's tips.

123. In early January 1998, Freeman and Timothy Siemers entered into a new arrangement. They decided to open a brokerage account in Timothy Siemers' name only, which they would use to purchase securities based on the inside information. Under their new arrangement, Freeman and Timothy Siemers agreed that all profits would be divided in half. An account was opened at Citicorp Investment Services to which both Timothy Siemers and Freeman had access (the "Siemers Shared Account"). It was agreed that Freeman could access the Siemers Shared Account whenever Freeman needed to make withdrawals of money as payment for inside information he provided to Timothy Siemers.

124. When Freeman joined CS First Boston in October 1998, their insider trading scheme continued, except Freeman provided confidential information concerning transactions contemplated by clients of CS First Boston.

125. Timothy Siemers and Freeman communicated on almost a daily basis to discuss confidential information Freeman obtained through his temporary employment. To avoid detection, Timothy Siemers and Freeman used code names to reference the transactions planned by clients of either Goldman Sachs or CS First Boston. The decision to open the Siemers Shared Account in Timothy Siemers' name only was another attempt to conceal their insider trading scheme. On one occasion, Freeman and Timothy Siemers withdrew approximately $13,000 of their illicit profits in the Siemers Shared Account to invest in a restaurant. To avoid detection, the investment in the restaurant was made in Timothy Siemers' name only.

126. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Timothy Siemers regarding at least 18 transactions planned by clients of those firms.

127. On at least one occasion, Timothy Siemers received a tip from Freeman that Timothy Siemers knew Freeman had received from Burke, a mutual friend of Siemers and Freeman who worked at CS First Boston with Freeman. Burke also disclosed the substance of the tip directly to Timothy Siemers.

128. After receiving tips from Freeman and Burke, Timothy Siemers traded in four brokerage accounts maintained in his own name, one of which was the Siemers Shared Account.

129. Following those tips, Timothy Siemers purchased in those accounts securities of the following 18 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Illinois Central, Coherent, Baker Hughes, Ciena, DSC, Camco, Getchell, USSB, SmarTalk, Fingerhut, Mercantile, Wang, CogenAmerica, RailTex, Medco, Splitrock, Cameron and Jason. From those trades, Timothy Siemers realized trading profits of at least $285,641. The purchases that Timothy Siemers made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 87 of Exhibit A hereto.

130. The Siemers Shared Account realized illicit profits of at least $28,081.85. Pursuant to their arrangement, Timothy Siemers personally handed over cash payments to Freeman. Timothy Siemers did not disclose to Freeman the profits realized in his other personal accounts or in the accounts of other persons who Timothy Siemers caused to trade. Freeman did not share in the profits realized in the accounts that Timothy Siemers did not tell Freeman about.

Timothy Siemers Causes His Two Brothers to Benefit Through Trades Based on Inside Information

131. The younger of Timothy Siemers' two brothers ("Unnamed trader No. 8) maintained a brokerage account in his own name, over which Timothy Siemers held discretionary trading authority (the "Discretionary Account"). Timothy Siemers caused Unnamed Trader No. 8 to purchase securities of the following 8 companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Getchell, USSB, SmarTalk, Fingerhut, Mercantile, CogenAmerica, Medco, and Splitrock. From those trades, Unnamed Trader No. 8 realized trading profits of at least $11,868. The purchases that Unnamed Trader No. 8 made are set forth in detail at page 94 of Exhibit A hereto.

132. Timothy Siemers caused trading in the Discretionary Account either by (a) tipping Unnamed Trader No. 8 to inside information, (b) recommending that Unnamed Trader No. 8 purchase the securities in question without indicating that the recommendations were based upon inside information or (c) by deciding himself to make the purchases for the Discretionary Account. By virtue of having caused trading in Unnamed Trader No. 8's account, Timothy Siemers is responsible to disgorge the profits realized through the trading.

133. The older of Timothy Siemers' two brothers ("Unnamed Trader No. 9") maintained a brokerage account in his own name. Timothy Siemers caused Unnamed Trader No. 9 to purchase securities of the following eight companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Ciena, DSC, Camco, Getchell, USSB, Mercantile, Railtex and Splitrock. From those trades, Unnamed Trader No. 9 realized trading profits of at least $24,950. The purchases that Unnamed Trader No. 9 made are set forth in detail at page 96 of Exhibit A hereto.

134. Timothy Siemers caused trading in Unnamed Trader No. 9's account either by tipping Unnamed Trader No. 9 to inside information or by recommending that Unnamed Trader No. 9 purchase the securities in question without indicating that the recommendations were based upon inside information. By virtue of having caused trading in Unnamed Trader No. 9's account, Timothy Siemers is responsible to disgorge the profits realized through the trading.

Freeman Tips Norman Grossman

135. While Freeman was working as a waiter at Les Halles restaurant, he met Norman Grossman, who is also known as Naftali. Grossman was a frequent patron at Les Halles. Freeman maintained a wine cellar in his cellar on behalf of Grossman, who is a wine collector. In early 1998, Freeman informed Grossman that Freeman could obtain confidential information regarding transactions contemplated by clients of Goldman Sachs, Freeman's employer.

136. Freeman and Grossman agreed that Freeman would provide Grossman with confidential information concerning transactions planned by clients of Goldman Sachs in exchange for wines that Grossman collected. When Freeman joined CS First Boston in October 1998, their insider trading scheme continued, except Freeman provided confidential information concerning transactions planned by clients of CS First Boston.

137. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Grossman relating to at least nine transactions planned by clients of those firms.

138. Grossman maintained a brokerage account in his name.

139. Following tips from Freeman, Grossman purchased in that account securities of the following nine companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Illinois Central, Coherent, Baker Hughes, Ciena, DSC, Camco, Fingerhut, Mercantile and Splitrock. From those trades, Grossman realized trading profits of at least $445,156. The purchases that Grossman made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 60 of Exhibit A hereto.

140. Whenever Grossman realized a profit on his purchases of securities based on inside information from Freeman, Grossman would authorize Freeman to take bottles of wine from the stock maintained at Freeman's residence. The bottles of wine represented Freeman's profits from Grossman's trades.

141. To avoid detection, Grossman and Freeman used code names to reference the transactions planned by clients of either Goldman Sachs or CS First Boston. In addition, they would sometimes rank potential transactions by referring to the transactions as expensive wines. The more profitable the transaction was perceived to be, the more expensive the wine.

Freeman Tips His Friends and Neighbors

Freeman Tips Lawrence Schwartz

142. Freeman met Lawrence Schwartz in 1997 while Freeman was providing computer services to Schwartz's wife. Sometime in the middle of 1997, Freeman advised Schwartz to purchase securities of a particular company. Schwartz realized a profit on the security when a merger involving the company was announced shortly after his purchase. At a lunch meeting after Schwartz realized this profit, Freeman disclosed to Schwartz that Freeman was working at Goldman Sachs and that Freeman could obtain confidential information concerning transactions planned by clients of Goldman Sachs. Freeman also told Schwartz that his earlier purchase recommendation was based on confidential information Freeman had obtained from Goldman Sachs.

143. Freeman agreed to provide Schwartz with confidential information concerning transactions planned by clients of Goldman Sachs in exchange for 10 percent of the profits realized from purchases of securities made by Schwartz on the basis of Freeman's tips. After a period of time, Schwartz began to give Freeman a higher percentage of Schwartz's total profits. When Freeman joined CS First Boston in October 1998, their insider trading scheme continued, except Freeman provided confidential information concerning transactions planned by clients of CS First Boston.

144. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Schwartz regarding at least twenty-two transactions planned by clients of those firms.

145. Schwartz maintained at least four brokerage accounts in his name.

146. Following tips from Freeman, Schwartz purchased in those accounts securities of the following twenty-two companies in advance of public announcements that the companies were involved in merger and acquisition transactions: OREM, Lukens, Sano, USF&G, Regal, Illinois Central, Coherent, Baker Hughes, Ciena, DSC, Camco, Getchell, USSB, SmarTalk, Fingerhut, Mercantile, Wang, CogenAmerica, RailTex, Medco, Cameron and Jason. From those trades, Schwartz realized trading profits of at least $822,100. The purchases that Schwartz made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 77 of Exhibit A hereto.

147. In return for Freeman's tips, Schwartz gave Freeman cash payments totaling between $30,000 to $50,000.

Freeman Tips Michael Akva

148. Freeman and Akva are personal acquaintances who met through their wives. In early 1998, while discussing Akva's finances, Freeman offered to assist Akva in making money in the stock market. Freeman revealed to Akva that Freeman was able to learn confidential information about transactions planned by clients of Goldman Sachs, Freeman's employer.

149. Originally, Freeman and Akva agreed that Freeman would provide Akva with confidential information concerning transactions planned by clients of Goldman Sachs in return for 10 percent of the profits realized from purchases of securities made by Akva on the basis of Freeman's tips.

150. Subsequently, shortly before June 1998, the agreement was changed. Freeman and Akva agreed to share in the profits derived from an account held in the name of Akva's wife (the "Akva Shared Account"). Freeman and Akva agreed to split any profits made in the Akva Shared Account in half. On at least one occasion, Freeman gave $3000 to Akva to cover the purchases of securities Akva made in the Akva Shared Account based on confidential information provided by Freeman. Akva then returned the $3000 along with an additional $500 as Freeman's portion of the profits made on the sale of the security.

151. Akva also gave Freeman a cellular phone. The cellular phone was maintained in the name of Akva's wife. The Akvas paid all the bills for the use of the phone, which often ran over $100 per month.

152. When Freeman joined CS First Boston in October 1998, Freeman and Akva's insider trading scheme continued, except Freeman provided confidential information concerning transactions planned by clients of CS First Boston.

153. During the course of his employment with Goldman Sachs and CS First Boston, Freeman obtained and disclosed confidential information to Akva regarding at least seven transactions planned by clients of those firms.

154. Following tips from Freeman, Akva purchased in the Akva Shared Account securities of the following seven companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Coherent, DSC, Camco, USSB, Mercantile, Medco and Splitrock. From those trades, Akva realized trading profits of at least $104,488. The purchases that Akva made while in possession of material nonpublic information provided by Freeman are set forth in detail at page 1 of Exhibit A hereto.

155. In return for Freeman's tips, Akva gave Freeman cash payments of over $13,000.

Freeman and Michael Akva Tip Robert Fricker

156. In late 1998, Akva informed Freeman that Akva had a friend, Robert Fricker (who is also known as Yrachmel), who was willing to invest a significant amount of money in securities in order to take advantage of Freeman's inside information. Akva told Freeman that Fricker was willing to pay Akva and Freeman 10 percent of Fricker's profits from purchases of securities based on inside information from Freeman and Akva. Akva introduced Freeman to Fricker over the telephone. During the telephone call, Freeman disclosed to Fricker that Freeman obtained the confidential information from his employer, an investment bank that advised parties to merger and acquisition transactions. On one occasion, Freeman met Fricker in person at lunch. On occasion, Fricker called Freeman directly to obtain confidential information. On other occasions, Fricker obtained such information from Akva.

157. Fricker maintained a joint brokerage account with his wife.

158. Following tips from Freeman and Akva, Fricker purchased in this account securities of the following four companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Getchell, USSB, Fingerhut and Medco. From those trades, Fricker realized trading profits of at least $946,546. The purchases that Fricker made while in possession of material nonpublic information provided by Freeman and/or Akva are set forth in detail at page 55 of Exhibit A hereto.

159. In return for tips, Fricker gave Akva over $38,000. Akva gave Freeman $4000 of the $38,000 and the rest was used to fund future purchases of securities in the Akva Shared Account. Fricker also gave Freeman at least $2000 in cash during their luncheon meeting.

Freeman Tips Richard Zelman

160. During the summer of 1998, Freeman informed Zelman, who was at one time Freeman's neighbor, that Freeman could obtain confidential information regarding transactions planned by clients of Freeman's employer. Freeman also informed Zelman that Freeman had profited from disclosing confidential information to others who purchased securities after receiving the information. Freeman offered to provide Zelman with confidential information if Zelman wanted an opportunity to make money.

161. After Freeman joined CS First Boston, he spoke with Zelman again about trading on inside information. Freeman agreed to provide Zelman with confidential information concerning transactions planned by clients of Freeman's employer, with the understanding that Zelman would pass the information to Zelman's friend ("Unnamed Trader No. 10"), so that Unnamed Trader No. 10 could purchase securities. After Unnamed Trader No. 10 made his first purchase following a tip from Zelman, Freeman informed Zelman that Freeman's employer was CS First Boston.

162. Freeman told Zelman that Freeman expected to receive 10 percent of the profits Unnamed Trader No. 10 made from purchases of securities based on information from Freeman.

163. During the course of his employment with CS First Boston, Freeman obtained and disclosed confidential information to Zelman regarding at least four transactions planned by clients of CS First Boston.

164. Unnamed Trader No. 10 maintained one brokerage account.

165. Following tips from Freeman, Zelman caused Unnamed Trader No. 10 to purchase in his account securities of the following four companies in advance of public announcements that the companies were involved in merger and acquisition transactions: Getchell, Fingerhut, Mercantile and Railtex. From those trades, trading profits of at least $200,905 were realized. The purchases that Unnamed Trader No. 10 made based on information received from Zelman are set forth in detail at page 75 of Exhibit A hereto.

166. In return for Freeman's tips, Zelman personally gave Freeman cash payments totaling approximately $6000. Zelman informed Freeman that Zelman had received the $6000 from Unnamed Trader No. 10. Zelman also received a separate payment of $6000 from Unnamed Trader No. 10.

167. Zelman caused Unnamed Trader No. 10 to trade either by tipping Unnamed Trader No. 10 to inside information or recommending that Unnamed Trader No. 10 purchase the securities in question without indicating that the recommendations were based upon inside information. By virtue of having caused trading in Unnamed Trader No. 10's account, Zelman is responsible to disgorge the profits realized through the trading.

Freeman Receives a Tip from Brad Burke

168. Freeman and Burke were both registered as temporary employees at Custom. Freeman and Burke also worked together at Philip Morris for a period of time. During the Fall of 1997, while Freeman was working at Goldman Sachs, Freeman informed Burke that Freeman was providing confidential information concerning transactions planned by Goldman Sachs' clients to a group of persons in exchange for money.

169. When Freeman learned that CS First Boston was hiring temporary employees from Custom for night time positions, Freeman informed Burke that Freeman was applying for one of the positions. Freeman knew that Burke was also looking for a night temporary employee position and encouraged Burke to apply. Burke began working at CS First Boston approximately one week after Freeman.

170. Around the Spring of 1999, Burke approached Freeman expressing an interest in Freeman's insider trading scheme. Freeman and Burke agreed that Burke would disclose to Freeman confidential information Burke learned about transactions involving clients of CS First Boston. They also agreed that Freeman would disclose the information to Freeman's network of tippees. Freeman agreed to give Burke a portion of the proceeds Freeman received from his tippees' trading profits.

171. Burke provided Freeman with confidential information on a least five potential CS First Boston transactions; however, only one of the transactions, the Mercantile Deal, actually occurred. Freeman disseminated the confidential information regarding the Mercantile Deal to numerous persons who traded based on the information. In addition, Burke personally knew one of Freeman's tippees, Timothy Siemers, to whom Burke directly provided inside information.

172. Burke's tips to Freeman and Timothy Siemers included information from which they could determine the identity of the issuer whose securities they should purchase.

173. In tipping Freeman and Siemers, Burke acted for his own benefit. Freeman provided Burke with at least $5000 in cash payments for the information Burke provided to Freeman. Freeman obtained the $5000 from certain of the Freeman Tippees. The funds represented a portion of the illicit profits reaped by those tippees from trading while in possession of information provided by Burke to Freeman, and then passed by Freeman to his tippees.

174. Burke knew or was reckless in not knowing that the information he communicated to Freeman and Timothy Siemers regarding each of the merger and acquisition deals to which he tipped them was nonpublic and that his communication of that information to them was improper and in breach of duties Burke owed to CS First Boston and its clients. Burke knew or was reckless in not knowing that Freeman and Siemers would either (1) effect transactions in the securities of the companies to be acquired in each of the transactions to which he tipped them or (2) disclose the information to others who were likely to effect such transactions.

175. All of the trading described herein was engaged in or caused by persons in possession of material nonpublic information.

176. Each of James Cooper, Erskine, Seminara, Lehrman, Karlsen, Siemers, Grossman, Schwartz, Akva, Fricker, Zelman, Benjamin Cooper, Conner, Benson, Allen, Geibel and Borders ( the "Tippees") knew, was reckless in not knowing or should have known that the information he (or she) received, directly or indirectly, from Freeman relating to merger and acquisition transactions was nonpublic and that the communication of that information to him (or her) was improper and in breach of a fiduciary or other similar duty of trust and confidence. Consequently, each of the Tippees inherited duties to neither trade while in possession of that information nor communicate it to others.

177. All of the trading described herein by the Tippees was done in breach of the duties they inherited.

178. Each of James Cooper, Conner, Benson, Siemers, Allen, Geibel, Akva, and Zelman breached the duties they inherited by communicating material nonpublic information to others or, while in possession of material nonpublic information, recommending or otherwise causing the purchase of securities by others. By engaging in the conduct described herein, each of Cooper, Conner, Benson, Siemers, Allen, Geibel, Akva, and Zelman acted for his own benefit, and was motivated by a desire for personal gain or acted to provide a gift to a relative or a friend.

179. Each of James Cooper, Conner, Benson, Siemers, Allen, Geibel, Akva, and Zelman knew, was reckless in not knowing, or should have known that the information he communicated to others regarding transactions involving the Goldman Sachs Clients or the CS First Boston Clients was nonpublic and that his communication of that information to others was improper and in breach of duties he inherited not to communicate that information to others. Each of Cooper, Conner, Benson, Siemers, Allen, Geibel, Akva, and Zelman knew, was reckless in not knowing, or should have known that each of the people to whom they provide such information would either (1) effect transactions in the securities of the companies to be acquired in each of the Goldman Sachs Deals and in each of the CS First Boston deals to which he tipped them or (2) disclose the information to others who were likely to effect such transactions.

180. By reason of the foregoing, Freeman and each of the other defendants violated Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]. Each of the defendants, directly or indirectly, by the use of the means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national securities exchange, in connection with the purchase or sale of securities: (a) employed devices, schemes, or artifices to defraud; (b) made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c) engaged in transactions, acts, practices or courses of business which operated as a fraud or deceit upon other persons, as is more fully set forth above.

SECOND CLAIM

Violations of Section 14(e) of the
Exchange Act [15 U.S.C. 78n(e)] and
Rule 14e-3 [17 C.F.R. 240.14e-3] Promulgated Thereunder

181. Paragraphs 1 through 180 are realleged and incorporated herein by reference.

182. At the time of the tipping and trading in the securities of Illinois Central described above, Canadian National Railway had taken a substantial step or steps toward commencing a tender offer for Illinois Central securities.

183. Allen, Benson, Benjamin Cooper, James Cooper, Erskine, Geibel, Grossman, Karlsen, Schwartz, Seminara and Siemers purchased, or caused the purchase of, securities of Illinois Central while in possession of material information relating to the tender offer, and while knowing or having reason to know the information was nonpublic and had been acquired directly or indirectly from Canadian National Railway or Illinois Central or a person acting on behalf of either, including Goldman Sachs.

184. Defendants Freeman, James Cooper, Conner and Allen communicated to other persons material, nonpublic information relating to the Canadian National Railway tender offer, under circumstances in which it was reasonably foreseeable that such communications were likely to result in the purchase of the securities of Illinois Central those persons.

185. At the time of the tipping and trading in the securities of Wang described above, Getronics had taken a substantial step or steps toward commencing a tender offer for Wang securities.

186. Erskine, Karlsen, Schwartz and Timothy Siemers purchased, or caused the purchase of, securities of Wang while in possession of material information relating to the tender offer, and while knowing or having reason to know the information was nonpublic and had been acquired directly or indirectly from Wang or Getronics, or a person acting on behalf of either, including CS First Boston.

187. Defendant Freeman communicated to defendants Erskine, Karlsen, Schwartz and Timothy Siemers material, nonpublic information relating to the Getronics tender offer, under circumstances in which it was reasonably foreseeable that such communications were likely to result in the purchase of the securities of Wang by defendants Erskine, Karlsen, Schwartz and Timothy Siemers.

188. At the time of the tipping and trading in the securities of Fingerhut described above, Federated Department Stores, Inc. had taken a substantial step or steps toward commencing a tender offer for Fingerhut securities.

189. Allen, Erskine, James Cooper, Benjamin Cooper, Erskine, Grossman, Karlsen, Lehrman, Schwartz, Seminara, Siemers, purchased, or caused the purchase of, securities of Fingerhut while in possession of material information relating to the tender offer, and while knowing or having reason to know the information was nonpublic and had been acquired directly or indirectly from Federated Department Stores, Inc. or Fingerhut, or a person acting on behalf of either, including CS First Boston.

190. Defendants Freeman, James Cooper, Conner and Zelman communicated to others material, nonpublic information relating to the Federated Department Stores, Inc. tender offer, under circumstances in which it was reasonably foreseeable that such communications were likely to result in the purchase of the securities of Fingerhut by others.

191. By the conduct described above, defendants Freeman, Allen, Benson, Conner, Benjamin Cooper, James Cooper, Erskine, Geibel, Grossman, Karlsen, Lehrman, Schwartz, Seminara, Siemers, and Zelman, directly or indirectly, by use of the means or instrumentalities of interstate commerce, the mails, or a facility of a national securities exchange, have violated Section 14(e) of the Exchange Act [15 U.S.C. 78n(e)] and Rule 14e-3 [17 C.F.R. 240.14e-3] promulgated thereunder.

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that this Court:

I.

Permanently restrain and enjoin the defendants and their agents, servants, employees, attorneys-in-fact, and assigns and those persons in active concert or participation with them, and each of them, from violating Sections 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 [17 C.F.R. 240.10b-5] promulgated thereunder.

II.

Permanently restrain and enjoin defendants Freeman, Allen, Benson, Conner, Benjamin Cooper, James Cooper, Erskine, Geibel, Grossman, Karlsen, Lehrman, Schwartz, Seminara, Siemers, and Zelman, and their agents, servants, employees, attorneys-in-fact, and assigns and those persons in active concert or participation with them, and each of them, from violating Section 14(e) of the Exchange Act [15 U.S.C. 78n(e)] and Rule 14e-3 [17 C.F.R. 240.14e-3] promulgated thereunder.

III.

Order each of the defendants to disgorge their trading profits from each of their illegal trades, including prejudgment interest thereon.

IV.

Order the defendants to disgorge all profits realized by the persons to whom they unlawfully communicated material, nonpublic information or on whose behalf the defendants traded securities or otherwise caused the purchase of securities while in possession of material, nonpublic information, and to pay prejudgment interest thereon.

V.

Order each of the defendants to pay civil penalties pursuant to Section 21A of the Exchange Act [15 U.S.C. 78u-1].

VI.

Grant such other relief as this Court may deem just and appropriate.

Dated: March 14, 2000 Respectfully submitted,

_________________________________

Peter H. Bresnan (PB 9168)
William R. Baker III
Antonia Chion
Charles J. Clark

Tracy R. Swann
Attorneys for Plaintiff
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0808 (202) 942-4567 (Chion)

http://www.sec.gov/divisions/enforce/extra/freecomp.htm


Modified:03/14/2000