SEC Settles Insider Trading Charges Involving Dick’s Sporting Goods Acquisition of Galyan’s Trading Company

Holding:

The U.S. District Court for the Western District of Pennsylvania has entered final judgments against Joseph J. Queri, Jr., a resident of Pittsburgh, Pennsylvania, and Kyle D. Kaczowski, a resident of Las Vegas, Nevada, in two separate district court cases. The SEC charged them, and fourteen other defendants, with insider trading in advance of Dick's Sporting Goods Inc.'s June 21, 2004 announcement that it intended to acquire Galyan's Trading Company, Inc. via a tender offer. Without admitting or denying the allegations in the complaint, Queri, Jr. and Kaczowski consented to the entry of a final judgment in which they were permanently enjoined from future violations of the anti-fraud provisions of the securities laws, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Queri, Jr. also agreed to pay disgorgement of $1.00, to preserve the SEC's ability to establish a fair fund, and to pay a one-time civil penalty for tipping in the amount of $218,026.00. Kaczowski agreed to pay disgorgement of $20,193.00, plus prejudgment interest of $6,661.07, and a civil penalty for trading and tipping two friends in the amount of $30,133.00.

Detailed Summary:

The SEC filed the two complaints on September 30, 2008 it filed in the U.S. District Court for the Western District of Pennsylvania against a total of sixteen individuals for insider trading in advance of Dick’s Sporting Goods Inc.‘s June 21, 2004, announcement that it intended to acquire Galyan’s Trading Company, Inc. via a tender offer.

The complaints alleged:

—Queri, Jr., Dicks’ Senior Vice President of Real Estate, tipped his close friend, Gary Gosson, and his father, Joseph Queri, Sr., about the acquisition.

—Gosson, located in Syracuse, New York, tipped his friends defendants Gary L. Camp, Michael A. Santaro, Joseph A.…

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