MOVIE PRODUCER, FIVE OTHERS SETTLE INSIDER TRADING CASE
Earlier this week the Commission went to Montana to name a daughter and her father in an insider trading action. Yesterday the agency went to Hollywood to bring another insider trading case. This time the action named as defendants: Mohammed Mark Amin, the producer or executive producer of 75 Hollywood films and owner of a production company; his brother Robert Reza Amin; Michael Mahmood Amin, Markâ€™s cousin; Sam Saeed Pimazar, Markâ€™s friend and long time business manager; Mary Teresa Coley, a long time friend of Mark and his brother; and Ali Tashakori, a contractor who did construction work for Mark and his brother. SEC v. Amin, CV12 â€“ 3960 (C. D. Cal. Filed May 7, 2012).
The action centers on transactions in the shares of DuPont Fabros Technologies, Inc. or DFT, a developer and manager of data centers. The inside information concerns DFTâ€™s pending loans and leases, announced in an earnings release on February 11, 2009. Mark had been a DFT board member since the company went public in October 2007. He is related by marriage to the CEO.
At a special board meeting on December 22, 2009 Mark, along with the other outside directors, were advised that the company was negotiating certain leases and bank loans that were important to the company. Prior to that meeting Mark and the other directors had been advised that the trading window was closed under the company insider trading policy and would not reopen until after the release of earnings.
Subsequently, on January 7, 2009 Mark spoke with the CEO about the transactions for several minutes. Shortly after the telephone call Mark told his cousin and his business manager Mr. Pirnazar about the pending transactions at DFT. The cousin purchased 145,000 DFT shares. Mr. Pirnazar bought 10,500 shares.
At the February 4, 2009 board meeting Mark received additional information about the pending transactions. The next morning he told his brother about the deal. Almost immediately his brother began buying stock. Overall he purchased 214,600 shares. The brother also told his close friend, Mary Teresa Coley, and Ali Tashakori, the contractor. Ms. Coley purchased 20,050 shares while Mr. Tashakori bought 15,000 shares.
Following the close of the market on February 11, 2009 the company issued an earnings release. It highlighted the new leases and lending arrangements. The share price rose 36% to $5.40 per share. The traders collectively had profits of $618,497. The Commissionâ€™s complaint alleges violations of Exchange Act Section 10(b).
Each of the defendants settled with the Commission, consenting to the entry of a permanent injunction prohibiting future violations of Exchange Act Section 10(b). Mark also agreed to the entry of an officer director bar for ten years. In addition, the defendants collectively agreed to pay disgorgement of $618,497 along with prejudgment interest and a penalties of over $540,000.