My good friends and colleagues Jim Sallah and Jeff Cox from Sallah & Cox, LLC have just proved that SEC complaints contain allegations, not facts. Jim and Jeff just finished a two week trial in Miami, and after an hour of deliberations, the jury cleared their client of any wrongdoing.
According to their press release, the jury found that Dr. Sebastian De La Maza, age 73, did not engage in insider trading by purchasing stock issued by Miami-based Neff Corp. only weeks before the company was acquired by Odyssey Investment Partners in 2005. Dr. De La Maza, according to the SEC’s complaint, allegedly learned about the acquisition from his daughter, who is married to Neff’s former CEO.
The trial was one of the first insider trading cases to be heard by a jury sitting in the Southern District of Florida in nearly a decade. Dr. De La Maza adamantly denied the allegations and presented evidence at trial that he had a seven-year history of closely following and trading Neff, and that his purchases prior to Neff’s acquisition were consistent with his trading history.
Despite the SEC’s arguments, it took the jury a little more than one hour to determine that Dr. De La Maza was not liable for insider trading. The defense verdict is the culmination of a federal investigation and litigation spanning nearly half of a decade.
Earlier this year, Sallah & Cox also successfully defended Dr. De La Maza in a private, shareholder suit in federal court in Miami based on the same allegations, which was dismissed by the Court on different grounds. (Kamin et al. v. Acord, et al., Case No. 09-22829-Civ-Jordan).
Jim and Jeff are partners in Sallah & Cox, LLC. Mark Astarita, the author of this blog, has a working relationship with the firm, whose web site is at www.sallahcox.com