SEC Charges Four Individuals With Insider Trading: NYSE Simultaneously Takes Related Action Against Dallas Stock Broker - Cases Brought In Connection With Univision Acquisition Of Hispanic Broadcasting

Concurrent with a SEC action, the New York Stock Exchange (NYSE) announced the institution of a related, coordinated enforcement proceeding against Stephen White, based on his recommendation of Hispanic Broadcasting stock while he was in possession of material nonpublic information about Univision's acquisition of Hispanic Broadcasting. Stephen White settled the NYSE proceeding, without admitting or denying the charges against him, by consenting to the entry of findings by the NYSE that he violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, by using means or instrumentalities of interstate commerce, or the mails, or a facility of a national securities exchange: (a) to employ a device, scheme or artifice to defraud; (b) to make an untrue statement of a material fact or to omit to state a material fact that was necessary to make statements that were made not misleading; or (c) to engage in an act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of a security. Stephen White also consented to an NYSE hearing panel decision that prohibits him from associating with a member firm for four years.

On October 9, 2003, the U.S. Securities and Exchange Commission (SEC) filed an insider trading case, in the United States District Court for the Northern District of Texas, against a Dallas stock broker, the stock broker's brother, a former employee of Univision Communications Corporation (Univision), and a director of Hispanic Broadcasting Corporation (Hispanic Broadcasting). The SEC charged each of those individuals with engaging in insider trading in the stock of Hispanic Broadcasting, ahead of the June 12, 2002 announcement that Univision would acquire Hispanic Broadcasting in an all-stock transaction. The defendants have agreed, without admitting or denying the SEC's allegations, to pay, in the aggregate, over $450,000 to settle the SEC's claims against them.

In its complaint, the SEC alleges that, in May and June of 2002, Stephen White, after learning about the acquisition from a potential client - a large Hispanic Broadcasting shareholder - recommended Hispanic Broadcasting shares to a personal friend and a brokerage customer, both of whom then purchased the stock ahead of the announcement. By his conduct, the defendant violated a duty of trust and confidence: Stephen White violated duties of trust and confidence that he owed to the parties from whom he learned of the acquisition. Following the public announcement of the acquisition on June 12, 2002, the price of Hispanic Broadcasting's stock increased, and the two individuals, who purchased the stock based on Stephen White's recommendations, earned trading profits.

Without admitting or denying the allegations in the complaint, each of the individual defendants has made, and the SEC has accepted, an offer of settlement in which each defendant consents: to the entry of a permanent injunction enjoining them from further violations of the below-listed provisions of the federal securities laws; to disgorgement of trading profits, plus prejudgment interest; and to payment of a civil money penalty. Specifically, Stephen White will disgorge $195,333 in profits that were earned by the individuals who purchased Hispanic Broadcasting shares based on his recommendations, plus prejudgment interest of $11,825, and pay a civil money penalty of $195,333. Stephen White will also consent to the institution of public administrative proceedings against him by the SEC, and entry of an order by the SEC, barring him from association with a broker-dealer or investment adviser, with a right to reapply for association after four years.

The SEC's complaint alleges that the individual defendants violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. About NYSE Regulation: The New York Stock Exchange is the designated examining authority for the major securities firms in the United States, including more than 250 member firms that deal with the public and account for more than 85 percent of the public customer accounts carried by broker-dealers. These firms service 93 million customer accounts, operate from more than 21,000 branch offices around the world and employ approximately 157,000 registered personnel. The NYSE is committed to strong and effective regulation of its members and member firms to protect investors, the health of the financial system, and the integrity of the capital-formation process. While self regulation in the U.S. securities industry begins with the broker-dealer, the NYSE plays a critical role by maintaining an extensive system for monitoring and regulating the activities of its membership. The Securities and Exchange Commission oversees these activities.

NYSE Regulation consists of three divisions: Member Firm Regulation, responsible for the financial, operational and sales-practice regulation of member organizations; Market Surveillance, responsible for surveillance of all trading activities at the Exchange; and Enforcement, which investigates and prosecutes violators of NYSE rules and federal securities laws. There are approximately 560 people in NYSE Regulation, representing approximately one-third of the Exchange's staff.