The law firm of Sirianni, Youtz, Meier & Spoonemore said in a statement Friday that District Court Judge Marsha Pechman summarily ruled that Jain must repay InfoSpace for the profits he made from prohibited ‘short-swing’ transactions.
US securities law prohibits insiders – executives with first-hand knowledge of a company’s financial health – buying and then selling, or selling and then buying, their own company’s stock within any six-month period.
Attorneys representing an InfoSpace shareholder claim Jain and his wife made $207m selling InfoSpace stock within the prohibited six-month-window. The law says those profits must be paid back, the attorneys said.
The court held that Naveen Jain… engaged in prohibited short-swing trades of InfoSpace stock, Infospace said in a statement Friday. InfoSpace cannot at this time determine with any certainty the amount, if any, or timing, of any payment that may be required to be made by the Jain defendants.
The ruling is merely the latest development in the ongoing acrimony between Jain and the company he founded, which began, as far as public eyes are concerned, when he was fired last year.
In a separate action, InfoSpace is suing Jain and other former employees for allegedly breaching the two-year non-competition clauses of their contracts when they founded Intelius, a startup technology firm, earlier this year.
At that time, Jain was still a director of InfoSpace, having been terminated from the CEO’s position in December 2002. He resigned from the board in April, but InfoSpace’s most recent regulatory filings show he still owns over 18% of the company.
Source: Computerwire
