The Securities and Exchange Commission announced that, on December 23, 2013, it charged David F. Marchand, of Campbell, California, a former Board Assistant to the Co-Chief Executive Officer of SAP AG, with unlawful insider trading in the securities of three issuers: SuccessFactors, Inc. (“SuccessFactors”), Ariba, Inc. (“Ariba”) and SAP AG (“SAP”). According to the SEC’s complaint filed in the U.S. District Court for the District of New Jersey, Marchand made a total of $43,500 in illicit profits through his trading.
The SEC’s complaint alleges that, while in possession of material nonpublic information concerning SAP’s intention to acquire SuccessFactors, Marchand purchased SuccessFactors common stock between November 21, 2011 and November 28, 2011, in advance of the December 3, 2011 public announcement that SAP and SuccessFactors had entered into a merger agreement pursuant to which a subsidiary of SAP would acquire SuccessFactors for $40 per share in a tender offer. The price of SuccessFactors common stock increased 51.4 percent after the announcement, and Marchand sold his shares, realizing illicit profits of $28,061.
The complaint further alleges that, in early January 2012, Marchand became aware of material nonpublic information regarding SAP’s favorable financial performance for the fourth quarter and year ended 2011, including its “best ever” software revenue numbers. After learning this information, Marchand purchased SAP American Depositary Receipts (ADRs) prior to SAP’s January 13, 2012 public release of its preliminary fourth quarter 2011 results. Marchand sold his SAP ADRs after the announcement, realizing illicit profits of $2,157.
The SEC also alleges that, a few months later, after he learned material nonpublic information about SAP’s intentions to acquire Ariba, Marchand purchased Ariba common stock on April 16, 2012, May 2, 2012 and May 8, 2012, in advance of the May 22, 2012 public announcement that a subsidiary of SAP and Ariba had entered into a merger agreement pursuant to which a subsidiary of SAP would acquire Ariba for $45 per share of common stock. The price of Ariba common stock increased approximately 19 percent after the announcement, and Marchand sold his Ariba shares, realizing illegal profits of $13,282.
Marchand has consented, without admitting or denying the SEC’s allegations, to the entry of a final judgment permanently enjoining him from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder; requiring him to pay $43,500 in disgorgement, $2,155 in prejudgment interest, and a penalty of $43,500. The settlement is subject to court approval.