"When I learned . . . I could not sell any securities . . . until a press release announcing (the results) was released, I immediately attempted to cancel my order to sell the 75 debentures," the younger Karcher said in his court papers.
But by then, 50 of the debentures already had been sold, and Karcher did not ask to buy them back, according to court documents.
The third-quarter earnings finally were announced on Oct. 23.
Forty-four minutes after the announcement was made, Carl Leo Karcher sold another 50 debentures. The SEC has not accused Karcher of insider trading in connection with the second sale of debentures.
U.S. District Judge Edward Rafeedie is to rule Sept. 12 on the SEC's motion for a summary judgment. If the SEC wins, the younger Karcher will not be tried and will be required to repay the $10,500 in potential losses avoided by selling before the earnings news was released, and possibly up to three times that amount as a civil penalty.
Armstrong also has filed a motion for summary judgment for his client. If the judge rules in Carl Leo Karcher's favor, the complaint will be dismissed against him alone.
Judge Rafeedie has set April 11, 1989, as the date to start what is expected to be a four- to six-week trial of all the defendants in the case.