Former Chairman of the Board of Publicly Traded Company Pleads Guilty to Insider Trading Scheme
The former chairman of the board of Home Diagnostics Inc., a health products company that previously traded on the NASDAQ stock exchange, admitted today to insider trading, U.S. Attorney Paul J. Fishman announced.
George Holley, 72, of Norwalk, Connecticut, pleaded guilty mid-trial to two counts of an indictment charging him with securities fraud. The government rested its case yesterday, and the defendant entered his plea this morning before U.S. District Judge Joel A. Pisano in Trenton federal court.
According to documents filed in this case and statements made in court:
Holley was the founder of Home Diagnostics Inc., a Florida-based company that sold diabetes management products, such as blood glucose monitoring systems. In February 2010, Home Diagnostics was purchased by Nipro Corp. a Japanese Company, for a purchase price of $11.50 a share, approximately 90 percent more than Home Diagnostics’ then-share price. Holley, who at the time served as Home Diagnostics’ chairman of the board, admitted that in the weeks before the public announcement of the sale to Nipro, he disclosed inside information concerning the sale to his cousin and friend and told them to buy Home Diagnostics stock just three weeks before the merger was publically announced. News of the merger caused Home Diagnostics stock to nearly double in price.
Holley, who was released on bond, faces a maximum prison term of 20 years and a maximum fine of $5,000,000 on each count. Sentencing before Judge Pisano is scheduled for December 4, 2012.
Source: U.S. Federal Bureau of Investigation
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