Posted by bloom on 10:22:37 06/17/04

COMPLAINT

Plaintiff U.S. Securities and Exchange Commission (the "Commission") alleges: SUMMARY

1. This is an insider trading case involving serial breaches of spousal duties of trust and confidence that resulted in an unlawful trading scheme yielding more than $3 million in ill- gotten gains. During 1998 and 1999, the defendants purchased, and tipped others who purchased, common stock or call options for the common stock of certain publicly traded companies on the basis of material, confidential, nonpublic information that these companies were targets of proposed but unannounced mergers or acquisitions. Preceding each instance of unlawful trading, defendant Fiore J. Gallucci received information concerning the proposed business combinations in confidential conversations with his wife, who learned it in the course of her employment as secretary to a senior partner in the mergers and acquisitions practice at Skadden, Arps, Slate, Meagher and Flom ( Skadden ).

2. Gallucci misappropriated the inside information from his wife by disclosing it to his close friend, defendant Ronald A. Manzo, who in turn disclosed it to, among others, his friend and business associate, defendant Gary B. Taffet. After receiving the inside information, Manzo and Taffet purchased and tipped others who purchased the subject securities. The defendants' actions resulted in illegal trading profits of at least $3 million when the prices of the securities rose in response to the public announcements of the mergers or acquisitions.

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