Seattle, Aug 22: Infospace founder Naveen Jain was ordered to repay dollar 247 million to the internet company for violating securities laws on insider trading. The award is believed to be one of the largest ever ordered under the Securities and Exchange Act's rule against so-called "short-swing" trading, in which company insiders trade shares within a six-month period of buying or selling them.
In May, a federal judge overseeing a shareholder lawsuit against Jain found he had committed illegal insider stock trades between December 1998 and May 1999, while serving as the internet company's chief executive. The lawsuit, filed by shareholder Thomas Dreiling, sought $207 million plus interest and restitution to Infospace. Yesterday, US district judge Marsha Pechman found Jain to have profited by 202.6 million dollars and tacked on interest, bringing the total to 247 million dollars.
Jain was fired as CEO by the Infospace board in December. The restitution order is subject to appeal. The order also triggers an automatic 10-day stay before the plaintiffs can try to collect.
"Whether we can collect the full amount of the judgment remains to be seen," said Steve Sirianni, whose law firm brought the case against Jain. "But we'll try our best."
In a statement issued late yesterday, Jain called the judgment "unjust and legally incorrect" and said he would appeal. Bureau Report