LOS ANGELES (CN) – A printing company CEO illegally made $77,400 by trading on inside information that the FDA had approved the Mentor Corp.’s silicone gel breast implants, the SEC claims in Federal Court. It claims Kent Barkouras, CEO of Irvine-based MyPrint Corp., got the inside info from Mentor’s ad agency, which subcontracted with Karkouras to distribute marketing material for Mentor’s implants.
The SEC claims that Mentor prepared advertising material for its implants before getting FDA approval, and Mentor’s ad agency subcontracted some of the work to MyPrint, which stored the material, “starter kits” for physicians, in its warehouse.
The FDA informed Mentor on Nov. 16, 2006, that on the following day, the FDA would officially announce the approval of Mentor’s implants, the SEC says.
“The advertising agency then told MyPrint about the FDA approval so that MyPrint could arrange for the shipment of Mentor’s starter kits as soon as the information was public,” the complaint states.
A flurry of email late in the afternoon of Nov. 16 concerned the FDA approval and shipment of the starter kits. Then, the SEC claims, “On Friday morning, Nov. 17, 2006, at 10:01 a.m., the regional manager [apparently, of the ad agency] sent a brief e-mail message to Barkouras: ‘Buy Mentor stock Now $$.’ Barkouras sent a strong reply within three minutes, instructing her: ‘I would keep this quiet if I were you. I do not know if you have ‘confidential’ information that could get (sic) be classified as inside information.’ She responded: ‘Understood.'”
Nonetheless, the SEC claims, on Nov. 17, Barkouras bought Mentor call options in two securities brokerage accounts. It demands disgorgement, penalties and an injunction.