MANHATTAN (CN) – The head of a PR firm who was hired to announce a corporate takeover used the inside information to buy $456,000 worth of stock in the takeover target, then sell it for a one-day profit of $194,000, the SEC says. It demands that Matthew Zachowski pay the money back, with interest and penalties.
Zachowski traded on inside information that Eurex Frankfurt was buying International Securities Exchange Holdings for $2.8 billion, the SEC claims in Federal Court.
Zachowski, 55, of New Canaan, Ct., was a founder and CEO of a Manhattan-based PR firm the SEC does not name in the complaint.
It says ISE hired Zachowski on April 23, 2007, to help it announce the merger on April 30. On Friday, April 27, Zachowski spent $456,000 on 10,000 shares of ISA, a stock he had never bought before. On Monday, April 30, when the merger was announced, ISE stock jumped to from $45.72 to $66.69. Zachowski sold all the stock he had bought for profit of $194,365.04, the SEC says.