Contractor settles insider trading claims
An Irvine-based marketing contractor for Mentor Corp., a Santa Barbara-based maker of silicone breast implants, agreed to pay $166,644 to settle Securities and Exchange Commission claims that he illegally traded on inside information.
In November 2006, after learning that the Food and Drug Administration had approved the sale of Mentor’s MemoryGel implants, Kent Barkouras, the largest shareholder and chief executive of closely held MyPrint Corp., bought options giving him the right to buy 546 Mentor shares at a set price, the SEC said.
After the stock market closed that day, Mentor announced the FDA approval. The next day the company’s stock price jumped more than 10%.
Barkouras sold the options over the following weeks, making more than $77,000 in profit, according to the SEC.
The government said Barkouras also passed the Mentor news to a relative who then bought and sold Mentor shares for a profit of $2,929.
MyPrint had been hired by Mentor’s advertising company to distribute MemoryGel “starter kits,” and was told about the FDA’s decision before it became public so that MyPrint could begin shipping the kits immediately, the SEC said.
The morning of the announcement, while Barkouras was buying options, a MyPrint employee sent him an e-mail saying, “Buy Mentor stock Now $$,” the regulator said. Barkouras reminded the employee about the confidentiality of the information about the FDA, the agency said.
In settling, Barkouras, 47, a resident of Newport Beach, didn’t admit or deny wrongdoing, the SEC said. His attorney, Nicola Hanna at Gibson, Dunn & Crutcher in Irvine, didn’t return a phone call seeking comment.
The case “demonstrates the serious consequences to consultants and contractors who exploit clients’ confidential corporate information for their personal benefit,” Rosalind Tyson, acting regional director of the SEC’s Los Angeles office, said in a statement.
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