Word: sec
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Dates: during 1980-1989
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Vaskevitch and Sofer allegedly used their setup to profit from at least twelve deals involving Merrill Lynch clients. Vaskevitch worked directly on one of them, the purchase in March 1986 of Herman's Sporting Goods by Britain's Dee Corp., which the SEC says produced a profit of $263,988 for the two suspects. Their biggest haul was K mart's 1985 takeover of Pay Less Drug ! Stores Northwest, which the SEC contends brought them nearly $1.2 million...
Their downfall began when officials of the New York Stock Exchange noticed unusually heavy advance trading in several takeover stocks. Since the 1960s, the exchange has been expanding a computerized Stock Watch system that monitors trading and alerts its experts to suspicious patterns. The exchange immediately tipped off the SEC, which built its case by tracing the trades to Vaskevitch and Sofer and then examining their telephone records. After the SEC filed the civil charges last week, a federal judge froze all current U.S. assets of Vaskevitch and Sofer to prevent the two from pulling the money...
Even so, the charges may have already shattered the careers of the two cosmopolitan go-getters. Merrill Lynch promptly fired Vaskevitch, citing his failure to give the company an explanation of the SEC's charges. The son of a wealthy Israeli tobacco trader, Vaskevitch had already risen to head a merger operation for a British investment house by age 30, when he joined Merrill Lynch in 1981. He quickly became Merrill's top international mergermaker and lived accordingly in a $2.4 million London home filled with antique furniture...
...more profits by speculating in the wildly bullish Tel Aviv stock market of that period. Sofer today maintains a suite in the Jerusalem Hilton, which he bought in 1982 for $18 million in partnership with a group of U.S. investors, among them Fort Worth Oilman Louis Barnett. The SEC claims that Sofer shared his illegal stock tips with Barnett and another friend, Michael Jesselson, whose father Ludwig Jesselson is the founder of Philip Bros., the U.S. commodity-trading house. So far, neither American has been charged...
Suspicions of a wider insider-trading conspiracy on Wall Street were fanned last week by the release of an SEC study of 172 tender offers during 1981-85. In every instance, the target company's stock price rose abnormally at least 17 days before the takeover bid was made public. The study reached no firm conclusion about the cause, acknowledging that several factors, among them rumors and speculative press reports, could help explain the phenomenon. Nonetheless, "it is possible, and logical to many, that illegal insider- trading behavior" might be a significant factor, the study said. If so, the crackdown...