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Exec's spouse settles insider trading case

April 24, 2007|Walter Hamilton | Times Staff Writer

All things considered, Gary K. Melton should have listened to his wife.

That's what Melton's attorney conceded Monday after his client agreed to pay about $31,000 to settle insider trading charges brought by the Securities and Exchange Commission.

Melton's wife, Farryn Melton, is vice president of strategic sourcing and procurement at Thousand Oaks-based Amgen Inc., where she had access to confidential information, according to the SEC.

In November 2005, the Newbury Park couple discussed favorable results in a clinical trial of a cancer antibody jointly developed by Amgen and Abgenix Inc., according to the SEC's complaint.

Melton, 54, told his wife that he might buy Abgenix shares, the complaint said, but she said nothing at the time.

A month later, Farryn Melton asked her husband whether he had bought any Abgenix stock. He said he hadn't and she told him not to, the SEC said.

But either that day or the next, Melton liquidated two brokerage accounts and over the next six days, in part with money borrowed from his brokerage, bought 2,050 Abgenix shares for $29,152, the SEC said.

Abgenix stock jumped 55% on Dec. 15, the day after Amgen said it would buy Abgenix for $2.2 billion. Melton sold all of his Abgenix shares that day and illegally gained $15,282, the SEC said.

Federal regulators alleged that Melton knew, or should have known, that his wife had access to confidential information. She was not charged with any wrongdoing.

Andrew Holmes, Gary Melton's attorney, said his client neither admitted nor denied the allegations but acknowledged one point. "He certainly executed the trades after his wife said, 'Don't trade,' " Holmes said. "You should really listen to your wife, apparently."

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