South Florida Arbitration & Litigation Lawyer Blog
Account Executive and Registered Representative Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Laywer, Russell L. Forkey, Esq.
March, 2012:
SEC v. Marleen Jantzen and John Jantzen, 1:10-cv-00740-JRN (W.D. Tex. [Austin Div.])
COURT ENTERS SUMMARY JUDGMENT AGAINST INSIDER TRADING DEFENDANTS JOHN JANTZEN AND WIFE, MARLEEN JANTZEN
Recently, United States District Judge James R. Nowlin of the Western District of Texas, Austin Division, entered summary judgment against Austin residents Marleen Jantzen, a former assistant to an executive at Dell, Inc., and husband John Jantzen, a Commission-registered securities broker. The Commission previously charged the Jantzens with insider trading in connection with a September 21, 2009 public announcement that Dell would acquire Perot Systems, Corp. in a tender offer transaction.
The Court found that both Jantzens insider traded in violation of Sections 10(b) and 14(e) of the Exchange Act, and Rules 10b-5 and 14e-3(a) thereunder, and that Marleen Jantzen also violated Exchange Act Rule 14e-3(d). The Court enjoined the Jantzens from future violations of those provisions and ordered them to pay disgorgement of $26,920.50, representing profits gained as a result of the illegal insider trading, plus prejudgment interest. The Court deferred a final ruling on the Commission’s request for monetary penalties, pending submission of further briefing by the parties.
In granting this relief, the Court specifically found that “Marleen tipped John and took unprecedented and persistent action to ensure that they were able to maximize their informational advantage.” The Court also found that the evidence showed “a high degree of scienter, particularly with regard to John, who as a licensed securities broker certainly knew what he was doing.”
The Commission’s complaint, filed on October 5, 2010, alleged that Marleen Jantzen learned through an internal Dell email material, nonpublic information regarding Dell’s impending tender offer for the shares of Perot Systems, Inc., and thereafter tipped her husband to the inside information. The Court found that on September 18, 2009, the last trading day before the tender offer announcement, Marleen Jantzen made a highly unusual cash transfer to the couples’ joint brokerage account. Within minutes of this transfer, John Jantzen bought Perot Systems call options and stock and Dell securities in the joint account-in total, purchasing 500 shares of Perot Systems common stock and 24 Perot Systems call option contracts.
On September 21, 2009, Dell and Perot Systems jointly announced the tender offer for Perot Systems’ shares. The stock price immediately rose from $17.91 to $29.56, or approximately 65% from the prior day’s closing price. When John Jantzen cashed out that day, the couple reaped one-day trading profits of $26,920.50.