Advertisement
YOU ARE HERE: LAT HomeCollections

Company Town

9 Accused of Insider Trading

Securities: Film producer, others are charged. Lawyers say the case is without merit.

March 12, 1998|DEBORA VRANA | TIMES STAFF WRITER

Andrew K. Licht, producer of the movie "The Cable Guy," and eight other Southern Californians were charged Wednesday with insider trading by the U.S. Securities and Exchange Commission.

In its complaint, filed in U.S. District Court in Los Angeles, the SEC alleges that a group of "close friends, family members and other associates" of Licht's older brother, Bel-Air attorney Roger L. Licht, made more than $200,000 in illegal profits by trading in the stocks of three East Coast companies during 1993 and 1994.

The suit also alleges that certain members of the "family and friends" group began a scheme to cover up their dealings after the investigation had begun.

Lawyers for the various defendants said the case is without merit.

"Andy Licht had no inside information at all. He unequivocally denies that he made any trades using insider information," said Bob Platt, Licht's attorney. "He is merely being sued because he is the brother of a board member."

The alleged pattern of insider trading occurred in the securities of three public companies, Medco Containment Services Inc. and Synetic Inc., both based in Montvale, N.J., and New York-based Leisure Concepts Inc., the SEC said.

Roger Licht, 44, who is named in the suit, sits on the board of directors of Synetic and was also a director of Medco, which was purchased for $6 billion by Merck & Co. in 1993.

"Roger Licht denies the allegations in the complaint. He looks forward to a trial in this matter in which he will be fully vindicated," said James Mercer, Licht's attorney.

The complaint alleges that in the days before the Medco-Merck merger, Roger Licht called brother Andy, 40, who then spoke to D. Mark Sandelson, a friend of the brothers, who then purchased Medco call options the day before the merger was announced. When Sandelson sold those options, he realized a profit of $63,000, the complaint alleges.

Sandelson, 42, of Los Angeles, is also named in the SEC complaint, along with Steven L. Weston, 40, of Pacific Palisades; Robert P. Korda, 43, of Los Angeles; William J. Barisoff, 44, of Long Beach; Lynn Weston, 44, of Pacific Palisades; Seymour J. Melnick, 58, of Whittier, and Ronald B. Schilling, 57, of Los Altos Hills.

Steven and Lynn Weston settled with the SEC for a total of $40,234. Melnick settled for interest and civil penalties totaling $20,240. Schilling settled for $15,082, the SEC said.

The case is part of a renewed vigilance by the SEC into insider trading.

"In the last fiscal year, we've brought 49 insider-trading cases, the most ever," said Thomas C. Newkirk, associate director of the SEC's enforcement division.

"We have more investigations underway than we've ever had. And a lot of them relate to mergers."

Advertisement
Los Angeles Times Articles
|
|
|