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between Jack Binion (Mr. Binion) and Orange Co. Orange Co.
voluntarily cooperated with the SEC investigation and provided
the SEC with all requested information.
In January 1986, the SEC issued a subpoena to Orange Co.
requesting documents and information regarding the acquisition
talks and matters related to Mr. Binion. At the time Orange Co.
received the subpoena, it was unaware of the SEC's investigation
of Orange Co. securities trades of Mr. Davis' sons.
Throughout 1986 and through September 1987, Mr. Davis
participated in the SEC investigation of Orange Co. During the
fall of 1987, Mr. Davis learned that the SEC was no longer
investigating trading in Orange Co. securities by Mr. Binion, but
instead it was focusing on transactions in Orange Co. securities
by his sons.
In September 1987, the SEC filed a civil complaint (SEC
complaint) against petitioner alleging violations of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
The SEC alleged that certain trading in Orange Co. stock by Mr.
Davis' sons was based on material, nonpublic information provided
to them by Mr. Davis.
Mr. Davis denied all allegations of wrongdoing contained in
the SEC complaint. On February 3, 1989, the SEC complaint was
dismissed with prejudice after obtaining an agreement from Mr.
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