|Thursday, September 11, 2008
Nancy Condon (202) 728-8379
Herb Perone (202) 728-8464
Washington, D.C. — The Financial Industry Regulatory Authority (FINRA) today announced that two former registered representatives, Peter D. Kelly and Daniel K. Ivandjiiski, have been barred from the securities industry for insider trading.
"Insider trading is a top priority at FINRA because it seriously undermines the public's confidence in the fairness of the markets," said Thomas Gira, Executive Vice President of FINRA's Market Regulation Department. "The actions announced today underscore that FINRA has the resources, technical expertise and capabilities to detect and investigate insider trading across the U.S. markets."
In the first of two separate actions, FINRA barred Peter D. Kelly of Belle Meade, NJ, the former head of sales and trading in the loan syndication department of Calyon Securities (USA) Inc., for tipping three friends about a pending merger between Duratek, Inc. and EnergySolutions LLC. Specifically, on Feb. 1, 2006 - the same day that Kelly learned of a pending merger between Duratek and EnergySolutions LLC, and six days before the merger's public announcement - Kelly placed telephone calls to three friends. Following the calls from Kelly, two of these friends bought shares of Duratek before the merger's public announcement on Feb.7, 2006. The third friend did not purchase shares directly, but eight brokerage accounts held in the names of relatives and acquaintances of the third friend purchased Duratek shares before the merger's announcement. Combined illegal profits earned on the sale of Duratek shares in these accounts after the merger's announcement amounted to $66,000.
FINRA found that Kelly breached his duty to his employer by failing to maintain the confidentiality of information about the merger. Kelly did not purchase Duratek shares personally and did not receive profits from the sale of Duratek shares by others. He was discharged by Calyon in October 2006.
In the second action, FINRA barred Daniel Ivandjiiski of New York, NY for buying shares of Hawaiian Holdings, Inc, which owns Hawaiian Airlines, one day before Hawaiian Holdings publicly announced that it had reached an agreement with its creditors to increase Hawaiian Airlines' credit lines by $91 million. Ivandjiiski previously had been employed at an investment banking firm working on the deal to increase the credit lines.
In May 2005, Ivandjiiski became employed by another firm, Miller Buckfire & Co. Nevertheless, before the financing deal for Hawaiian Holdings was announced, he obtained confidential documents that his former firm had prepared concerning the impending deal. On March 14, 2006, while in possession of that material, non-public information, Ivandjiiski bought 1000 shares of Hawaiian Holdings for $4.75 a share. On March 15th, when the new financing was publicly announced, the share price of Hawaiian Holdings increased 6%, to close at $5.30. On March 21, 2006, Ivandjiiski sold his 1,000 shares of Hawaiian Holdings stock for $5.53 per share, for a profit of $780.
In settling these matters, neither Kelly nor Ivandjiiski admitted nor denied the charges, but consented to the entry of FINRA's findings.
In August 2008, FINRA entered into agreement with 10 U.S. Exchanges to consolidate the surveillance and investigation of insider trading activity in equities securities. Once the agreement is approved by the Securities and Exchange Commission, FINRA will be responsible for monitoring insider trading activity in all NASDAQ and AMEX-listed equity securities, regardless of where the trading occurs in the U.S. NYSE Regulation will be responsible for investigating insider trading in NYSE and NYSE Arca-listed securities, on all of the exchanges that are parties to the agreement. The new agreement will enable FINRA and NYSE Regulation to readily identify illegal insider trading across the diverse U.S. equities markets.
Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2007, members of the public used this service to conduct 6.7 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999.
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. Created in 2007 through the consolidation of NASD and NYSE Member Regulation, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business-from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at www.finra.org.