UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Rel. No. 17662 / August 6, 2002

JOSEPH PALERMO ORDERED TO PAY DISGORGEMENT OF INSIDER TRADING PROFITS AFTER JURY VERDICT

SEC v. Joseph C. Palermo (United States District Court for the Southern District of New York, C.A. No. 99-CV-10067, filed September 28, 1999)

Joseph C. Palermo, a former New York City corrections officer was ordered to pay full disgorgement by Judge Allen G. Schwartz of the United States District Court for the Southern District of New York. Judge Schwartz's order, which was issued July 17, 2002, resulted from a three day jury trial which concluded with a verdict that Palermo, a third level tippee, had purchased out of the money put options in Edison Brothers Stores in August 1996 and tipped additional individuals allowing them to trade on inside information as well. All other defendants consented to entry of judgment against them without admitting or denying the allegations of the complaint. (See also Lit. Rel. No. 16314)