Tuesday, July 10, 2007

Sillerman's Ex-Butler Charged With Insider Trading

Posted on Tue, Jul 10, 2007 at 4:00 AM

From the Associated Press:

WASHINGTON: The British-born butler neither admits nor denies that he did it. But he has agreed to pay $66,180 (€48,587) to settle charges that he illegally traded stock using confidential information on the acquisition plans of his former boss, businessman Robert F.X. Sillerman.

The Securities and Exchange Commission announced the settlement Monday with the former butler, Graham J. Lefford. Under the accord, he is paying a $31,450 (€23,089) civil fine and $34,730 (€25,497) in restitution of trading profits plus interest.

Lefford, who originally disputed the insider trading allegations, neither admitted nor denied wrongdoing in the settlement but did agree to refrain from future violations of the securities laws.

In a civil lawsuit filed in September, the SEC accused Lefford of illegally trading shares of Sports Entertainment Enterprises Inc., which Sillerman acquired in December 2004 in a $100 million deal.

Sillerman, a prominent media and entertainment entrepreneur, bought the then-dormant public shell company as a vehicle to acquire the commercial rights to Elvis Presley's name and image from the Presley estate. The estate brought in nearly $45 million in 2003, and Sillerman said at the time that more aggressive marketing could make Elvis an even bigger earner.

The SEC said Lefford made $48,525 in profit on a $600 investment by selling shares of the company after they skyrocketed following the announcement of the deal.

Lefford, who is originally from Britain and became a U.S. citizen, was hired by Sillerman in early 1999.

Sillerman amassed a fortune from buying and selling media properties. In addition to the Elvis rights, his company, CKX Inc., also owns the "American Idol" TV show and other entertainment ventures.

The SEC alleged that in the summer of 2004, as Sillerman was negotiating with the Presley estate, Lefford found out about the deal from documents faxed between Sillerman's Manhattan office and his summer residence in tony Southampton, where Lefford was the house manager.

On Aug. 12, according to the SEC, Lefford bought 5,000 shares of Sports Entertainment at 12 cents a share. After the deal was announced in December, the stock price jumped to $9.10, the SEC said.

By using the nonpublic information, Lefford "breached an express duty of trust and confidence" under the terms of a written confidentiality agreement he had signed covering Sillerman's business and financial affairs, the SEC said.



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