WASHINGTON — A California builder and his sister-in-law agreed Tuesday to pay back more than $300,000 to settle charges that they used insider information to profit on McDonnell Douglas Corp.'s 1984 takeover of Tymshare Inc.
In a civil complaint filed in U.S. District Court in San Francisco, the Securities and Exchange Commission charged that Alfred Kopfmann, 32, and Amie Mosher, 26, bought Tymshare options and stock after getting inside information that McDonnell Douglas was about to launch a tender offer.
Kopfmann, owner of a Redwood City, Calif., construction company, and Mosher, who works for a San Francisco landscape architectural firm, did not admit or deny the charges.
But as part of the settlement, which was announced simultaneously with the filing of the charges, the two agreed to accept a court order barring them from further violations of federal securities laws.
Kopfmann agreed to pay back $302,517.61 in illegal profits he made on trading Tymshare options, and Mosher agreed to pay back $340 in illegal profits on Tymshare common stock.
No Financial Penalties
Because the violations occurred before August, 1984, when tougher laws on insider trading took effect, the SEC was not empowered to seek financial penalties.
In more recent insider trading cases, the agency has been empowered to seek penalties totaling three times the illegal profits, in addition to ordering the repayment of the profits, although it has not always opted to exercise that authority.
In its complaint, the SEC charged that Kopfmann learned that a McDonnell Douglas takeover proposal would be accepted "by virtue of his relationship" to his father-in-law, Roger Mosher, a member of the Tymshare board of directors.
McDonnell Douglas, the St. Louis-based aircraft maker and defense contractor, completed its takeover of the Cupertino, Calif., computer information and telecommunications firm in mid-1984.
Kopfmann and his wife were living at Roger Mosher's house at the time McDonnell Douglas launched its $25-a-share tender offer for Tymshare, the SEC said. Amie Mosher is Roger Mosher's daughter.
Timing of Purchase
The SEC complaint did not say explicitly that Kopfmann and Amie Mosher learned of the deal from Roger Mosher. But it said the two bought their options and stock early on Feb. 23, 1984, the morning after Tymshare's board agreed informally to accept the McDonnell Douglas offer.
Roger Mosher was personally involved in the negotiations with John McDonnell, McDonnell Douglas' chief executive, the SEC said. Some of talks took place on the telephone from Roger Mosher's house, it said.
On the morning of Feb. 23, 1984, Kopfmann bought 500 Tymshare call options and Amie Mosher bought 40 shares of Tymshare common stock, the SEC said.
The purchases were made about the same time the Tymshare board formally approved the tender offer and only hours before trading in the company's stock was halted on the New York Stock Exchange pending a news announcement, it said.
The two companies announced the tender offer on Feb. 27, sending Tymshare stock to nearly $24 a share, from $13 to $14 immediately before the trading halt. Shortly thereafter, the two sold their stock and options, the SEC said.