U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16398 / January 4, 2000
SECURITIES AND EXCHANGE COMMISSION v. MICHELLE NGUYEN, LISA NGUYEN AND HAO VU, Civil Action No. SACV 99-830 AHS (ANx) (C.D. Cal.)
The Securities and Exchange Commission ("Commission") announced that on November 18, 1999, the Honorable Alicemarie H. Stotler, United States District Judge for the Central District of California, entered final judgments of permanent injunction and other relief against Michelle Nguyen ("Nguyen") and her sister and brother, Lisa Nguyen ("L. Nguyen") and Hao Vu ("Vu"), all of whom are residents of Orange County, California. The final judgments permanently enjoin Nguyen, L. Nguyen and Vu from future violations of the antifraud provisions of the federal securities laws and require payment of disgorgement of and interest on insider trading profits plus civil penalties. Nguyen, L. Nguyen and Vu consented to the entry of the final judgments without admitting or denying the allegations in the Commission's complaint.
In its complaint, the Commission alleged that the three defendants purchased Trimedyne stock based upon nonpublic information about an action taken by the Food and Drug Administration ("FDA"). In March 1996, the FDA cleared Trimedyne to market a medical laser (the "Urolase") for the treatment of prostate enlargement. One week later, Trimedyne publicly announced that clearance. Nguyen was Trimedyne's controller, and in that capacity, learned that the company had received notice from the FDA that the clearance to market the Urolase was "imminent." After learning that FDA clearance was imminent, Nguyen purchased 1,000 shares of Trimedyne stock. One day after the company received the FDA clearance, but prior to any public announcement of the development, Nguyen purchased an additional 1,100 shares of Trimedyne stock in her daughter's account. Nguyen purchased an additional 2,000 shares of Trimedyne stock in her own account in the week prior to the company's public announcement of the FDA clearance.
The Commission also alleged that, in addition to trading on her own behalf, Nguyen tipped her sister and brother about the FDA clearance. On the same day Nguyen made her second purchase of Trimedyne stock, her sister, L. Nguyen, purchased 4,966 shares of Trimedyne stock in four different accounts, and her brother, Vu, purchased 4,000 shares of Trimedyne stock. After the announcement, Nguyen, L. Nguyen and Vu sold all of their shares of Trimedyne stock, making a combined profit of $82,967.87.
Nguyen, L. Nguyen and Vu, without admitting or denying the allegations in the complaint, consented to entry of judgments permanently enjoining them from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, requiring payment of disgorgment of $41,662.50 for Nguyen, $15,305.37 for L. Nguyen, and $26,000.00 for Vu, and imposing civil penalties of $41,662.50 for Nguyen, $15,305.37 for L. Nguyen, and $26,000.00 for Vu.http://www.sec.gov/litigation/litreleases/lr16398.htm