SEC accuses midstate candy executive, brother of insider trading
The U.S. Securities and Exchange Commission has accused the now-president of York County-based Wolfgang Candy Co. of insider trading, saying he disclosed material, nonpublic information in 2009 about a pending tender offer to his brother, who then bought stock and profited from it.
Wolfgang released a statement from CEO Benjamin A. McGlaughlin saying: "Mr. Jacobs has previously disclosed to us the facts of this case. The case has no bearing on his work here and we respect and fully support his pursuit of justice in this matter."
When contacted, Jacobs provided information to reach David Wilson with law firm Thompson Hine LLP. Wilson called the SEC civil case against Andrew Jacobs "baseless" and said he has been "highly cooperative" with the investigation.
According to a court filing, after discussions in early December 2009 between Andrew Jacobs, who became president of Wolfgang after it emerged from bankruptcy proceedings last year, and his brother, Leslie Jacobs, the latter acquired shares of Tennessee-based Chattem Inc.
Andrew Jacobs' friend since business school and then brother-in-law, Blair Ramey worked for Chattem and had been at a meeting of Chattem and Sanofi-Aventis senior officers that caused him to believe a tender offer was going to take place, according to the court filing.
Ramey met and talked with Andrew Jacobs in confidence about the issue, but Jacobs then shared information about the upcoming offer with Leslie Jacobs, the document states.
On Dec. 21, 2009, Chattem was indeed named as the target of a tender offer by Sanofi-Aventis, a French pharmaceutical company, and the price of Chattem's shares went up, according to the document.
Leslie Jacobs made a profit of more than $49,000 when he sold his shares shortly after the announcement, the document states.
This is the eighth case the commission has brought related to the acquisition of Chattem by Sanofi-Aventis, the SEC said in a release Tuesday.
Wilson's statement additionally states that the government's principal witness has refuted facts in the complaint and that Andrew Jacobs "looks forward to his day in court."
"Mr. Jacobs did not make any trades related to this case, did not tip anyone on a trade, did not share any profits as part of any quid pro quo and did not in any way misappropriate any material non-public information," according to the statement.
Andrew Jacobs previously worked for Dauphin County-based The Hershey Co.
The two face potential penalties that include not being allowed to work in the financial industry for a period of time, giving back the profits from the transaction with interest and additional civil monetary penalties, said Christina D'Amico, a spokeswoman for the SEC.
The commission also is seeking an officer and director bar against Andrew Jacobs, meaning he could not be a director or officer for any public company for a certain amount of time, she said.