SEC CHARGES MOVIE PRODUCER AND RING OF RELATIVES AND BUSINESS PARTNERS WITH INSIDER TRADING

FROM:  SECURITIES AND EXCHANGE COMMISSION
May 8, 2012
The Securities and Exchange Commission today charged a Hollywood movie producer along with his brother, cousin, and three others in his circle of friends and business partners with insider trading in the stock of a company for which he served on the board of directors.

The SEC alleges that Mohammed Mark Amin, prior to a company board meeting, learned confidential information about expanding business opportunities for DuPont Fabros Technology Inc., which develops and manages highly-specialized and secure facilities that maintain large computer servers for technology companies through long-term leases with them. The SEC alleges that Amin tipped his brother Robert Reza Amin, cousin Michael Mahmood Amin, and long-time friend and business manager Sam Saeed Pirnazar with nonpublic details about three new leases that DuPont Fabros was negotiating and three loans it was obtaining to develop new facilities.  The SEC also alleges that the three illegally traded on the basis of that inside information.  Reza Amin went on to tip his friends and business associates Mary Coley and Ali Tashakori, who also illegally traded.  Together they made more than $618,000 in insider trading profits when DuPont Fabros stock rose 36 percent after the company issued an earnings release highlighting the development of these new facilities.
Mark Amin and the five others agreed to settle the SEC’s charges by collectively paying nearly $2 million.

According to the SEC’s complaint filed in U.S. District Court for the Central District of California, Mark Amin is a motion picture executive with his own production company.  He lives in Los Angeles and is credited as the producer or executive producer for more than 75 Hollywood movies including Frida,Eve’s Bayou, and four movies in the Leprechaun series.  In 2007, Amin began serving on the board of directors at DuPont Fabros, a real estate investment trust (REIT) whose common stock is listed on the New York Stock Exchange.  DuPont Fabros develops and operates wholesale data centers that maintain computer servers for such companies as Microsoft, Facebook, and Google. Amin resigned from the board in February 2011.

The SEC alleges that Mark Amin first learned nonpublic information about new leases and loans pending for DuPont Fabros during a board meeting in December 2008, and he further discussed their status in a phone conversation with the company’s CEO on Jan. 7, 2009.  According to the SEC’s complaint, that same day, Mark Amin tipped his cousin Michael Amin of Los Angeles and his friend and business manager Pirnazar of Manhattan Beach, Calif.  The SEC alleges that in fact, Mark Amin initially asked Michael to lend him money and discussed Michael’s purchasing DuPont Fabros stock for both of them in Michael’s name.

On February 4, Mark Amin received materials for a special board meeting to approve the three new loans.  The SEC alleges that the next morning, he tipped this inside information to his brother Reza Amin of Los Angeles, who began buying DuPont Fabros stock just 17 minutes after receiving the tip.  The board approved the three new loans later that day.
According to the SEC’s complaint, Reza Amin tipped Coley, a British citizen who lives in Los Angeles with whom he has a daughter.  They are also business partners in a small chain of video stores.  On February 6, he brought Coley into the local E*Trade branch office where he maintained a brokerage account so she could open a new brokerage account to purchase DuPont Fabros shares.  The SEC alleges that Reza Amin also tipped his friend Tashakori, who lives in Rolling Hills, Calif. and as a self-employed licensed general contractor was engaged in various construction projects for both Mark and Reza Amin.  The SEC also alleges that Tashakori purchased DuPont Fabros stock based on Reza Amin’s tip.

According to the SEC’s complaint, DuPont Fabros issued its 2008 earnings release after the market closed on February 11, 2009, and highlighted that it had obtained the three new loans and entered into the three new leases.  The SEC alleges that from January 8 to February 10, Michael Amin had purchased 145,000 DuPont Fabros shares that yielded him $318,646 in insider trading profits when the stock price soared upon news of the earnings release.  The SEC also alleges that Pirnazar purchased 10,500 shares and made $19,915 in illicit profits.  From February 5 to February 11, Reza Amin purchased 214,600 DuPont Fabros shares for an eventual illegal profit of $241,767.  Coley purchased 20,050 shares and realized insider trading profits of $23,690.  Tashakori purchased 15,000 shares and profited $14,479.

The SEC’s complaint charges the Amins, Pirnazar, Coley, and Tashakori with violating Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5(a) and (c) thereunder.  They have agreed to collectively pay disgorgement of $618,497, prejudgment interest of $78,000, and penalties totaling $1,236,994.  They also have agreed to the entry of a final judgment permanently enjoining them from violating Section 10(b) of the Exchange Act and Rule 10b-5.  Mark Amin has additionally agreed to a bar from serving as an officer or director of a public company for 10 years.  The settlement is subject to court approval.

The SEC’s investigation was conducted by Los Angeles Regional Office enforcement attorney John Britt.  The SEC thanks the Financial Industry Regulatory Authority (FINRA) for its assistance in this matter.

INSIDER TRADER CHARGED IN ACQUISITIONS OF MILLENNIUM PHARMACEUTICALS INC. AND SEPRACOR INC.

INSIDER TRADING: GETTING BY WITH A LITTLE HELP FROM YOUR FRIEND The following is an excerpt from the SEC website: “Washington, D.C., Sept. 15, 2011 — The Securities and Exchange Commission today charged a former global consulting firm executive and his friend who once worked on Wall Street with insider trading on confidential information about impending takeovers of two biotechnology companies. The SEC alleges that Scott Allen learned confidential information in advance of the acquisitions of Millennium Pharmaceuticals Inc. and Sepracor Inc. through his work at a global consulting firm that was advising the acquiring Japanese companies as they made cash tender offers. Allen allegedly tipped his longtime friend John Michael Bennett, an independent filmmaker who had previously worked at a Wall Street investment bank, as each acquisition took shape. On the basis of the nonpublic information, Bennett purchased thousands of dollars in call options in the companies and also tipped his business partner at the independent film company they co-own. The insider trading by Bennett and his tippee generated more than $2.6 million in illicit profits. Allen received cash from Bennett in exchange for the tips. In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced the unsealing of criminal charges against Allen and Bennett. "Allen sold his clients' secret information to a dear friend for easy cash, thinking they wouldn't get caught," said George S. Canellos, Director of the SEC's New York Regional Office. "We will continue pursue every angle of investigation to uncover and punish this type of betrayal of trust." According to the SEC's complaint filed in federal court in Manhattan, Allen and Bennett have been close friends for more than 15 years. Their scheme allegedly began in February 2008 as Allen first learned about the Millennium transaction through his work at the consulting firm, where he is no longer employed. Allen communicated with Bennett about the Millennium and Sepracor transactions through either phone calls or in-person meetings, some of which are tracked through their simultaneous use of Metrocards at subway stations in New York City and ATM withdrawals of cash made by Bennett prior to those meetings. The SEC alleges that Allen first obtained nonpublic information about the Millennium transaction in mid-February 2008 when his firm began advising Japan-based Takeda Pharmaceutical Company during its negotiations with Millennium. Allen tipped Bennett with inside information concerning Takeda's impending cash tender offer to acquire Millennium's shares. For instance, after Allen received an evening e-mail on February 27 from a Takeda representative stating that the contemplated offer was for "23, potentially 24 per share," he called Bennett just minutes later and then twice again that evening. Bennett then called his business partner. More calls took place the following day, and then on February 29 and continuing up until the week prior to the April 10 public announcement of the acquisition, Bennett and his business partner began amassing Millennium call options. The price of Millennium shares increased more than 48 percent after the public announcement, and beginning that afternoon Bennett and his business partner sold their entire positions of Millennium call options for ill-gotten gains of more than $602,000 and $1.12 million respectively. According to the SEC's complaint, Allen later was participating in his employer's due diligence work in May 2009 for Japanese firm Dainippon Sumitomo Pharma Co. Ltd. (DSP) in connection with its impending acquisition of Sepracor. Allen again tipped Bennett with inside information about the upcoming transaction. In the months leading up to the September 3 public announcement that DSP had agreed to acquire Sepracor through a cash tender offer, Bennett purchased thousands of dollars worth of call options in Sepracor and again tipped his business partner who did the same. Following the public announcement, Sepracor's stock price rose more than 26 percent. Both Bennett and his business partner then liquidated their Sepracor holdings for ill-gotten profits of more than $516,000 and $388,000 respectively. The SEC's complaint names Bennett's wife as a relief defendant for the purposes of seeking disgorgement of unlawful profits in brokerage accounts that Bennett held jointly with her. The SEC's complaint charges Scott Allen and John Michael Bennett with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 14(e) of the Exchange Act and Rule 14e-3 thereunder. The complaint seeks a final judgment permanently enjoining the defendants from future violations of these provisions of the federal securities laws and ordering them to disgorge their ill-gotten gains plus prejudgment interest and pay financial penalties. The SEC's investigation was conducted by Charles D. Riely and Amelia A. Cottrell of the SEC's Market Abuse Unit in New York and Layla Mayer of the SEC's New York Regional Office. The SEC acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York, Federal Bureau of Investigation, and Options Regulatory Surveillance Authority. The SEC's investigation is continuing.”