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stock) traded at between $41 7/8 and $48 5/8 per share. In
August 1984, following its redemption of 8.3 million shares
(approximately 25 percent) of old FMC stock at an average price
of approximately $54 per share, old FMC stock traded at
approximately $60 per share.
In early 1985, petitioner retained the investment banking
firm of Goldman, Sachs & Co. (Goldman) to advise it financially
on a possible corporate restructuring. Goldman implemented its
normal procedures for maintaining the confidentiality of
information relating to petitioner, including assigning
petitioner’s project with a code name. Petitioner agreed to pay
Goldman a fee of approximately $17.5 million upon consummation of
any restructuring.
David S. Brown (Brown) was a Goldman employee who was not
assigned to petitioner’s project. Unbeknownst to Goldman, Brown
had been providing non-public information on pending transactions
to a number of individuals, including Boesky, Ira Sokolow
(Sokolow) of Shearson Lehman Bros., Inc. (Shearson), and Dennis
Levine (Levine) of Drexel Burnham Lambert (Drexel). While
working for Goldman, Brown learned that petitioner was
considering a major transaction and passed on that information to
Sokolow. Sokolow passed on the information to Levine, and Levine
passed on the information to Boesky.
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