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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23359 / September 24, 2015

Securities and Exchange Commission v. Richard Condon, et al., Civil Action No. 15 CV 7443 (C.D. Cal., filed September 23, 2015)

On September 23, 2015, the Securities and Exchange Commission charged a consultant and his friend with insider trading in the options of P.F. Chang's China Bistro based on nonpublic information about an impending acquisition offer.

The SEC alleges that Richard G. Condon, a consultant to Panda Restaurant Group, tipped Jonathan Ross with confidential details about the bidding process for P.F. Chang's that he learned while providing executive coaching services to Panda's top management executives. Panda was involved in the bidding process, but did not ultimately make a tender offer for P.F. Chang's. According to the SEC's complaint, Ross then purchased risky, out-of-the-money call options for P.F. Chang's securities and tipped his friend Ali Sagheb so he could do the same. Ross, Sagheb, and a third trader who is now deceased immediately sold their options for a combined total of approximately $300,000 following a public announcement about the tender offer by a third party for ownership of P.F. Chang's.

Sagheb, who is named as a relief defendant in the SEC's complaint, has agreed to pay $19,829, which comprises his illicit trading profits plus interest. The SEC's case continues against Condon and Ross in federal court in Los Angeles. The SEC's complaint charges both men with violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-3 thereunder.

The SEC's investigation was conducted by Sara Kalin of the Los Angeles office with assistance from John Rymas in the Enforcement Division's Market Abuse Unit, which detected the illegal trading through data analysis tools in its Analysis and Detection Center. The case was supervised by Marc Blau and the litigation will be led by Gary Leung and Donald Searles. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2015/lr23359.htm


Modified: 09/24/2015