An Atlanta businessman has agreed to pay $327,707 to settle an insider trading suit involving trades just before the announcement of the Southwest Airlines-AirTran Airways merger.
The case filed by the U.S. Securities and Exchange Commission alleged the businessman, John M. Darden III, learned of the Southwest-AirTran deal from an AirTran board member before the merger was announced and bought AirTran shares and call options based on the information.
The SEC alleged Darden sold the calls and shares after the Sept. 27, 2010 announcement of the Southwest-AirTran deal.
Darden, 73, is described in the SEC’s complaint as “the owner of a non-operating consulting company.” He has known the board member for more than 30 years and shared an office suite with a single phone number and secretary, according to the SEC’s court filing. It does not identify the board member.
Darden signed a consent agreement in October saying he would pay back the $159,160 in profits he made, a civil penalty of the same amount and $9,387 in interest. However, in reaching the settlement, Darden did not admit or deny the allegations. The settlement is subject to court approval.
AirTran was based in Orlando with its largest hub in Atlanta. Its operations are being gradually converted over to Southwest operations.
An economy that sent more people to the workforce instead of the classroom, tougher requirements for financial aid, and a higher bar for admissions are among the factors that contributed to a drop in enrollment at the state’s public colleges and universities for the second year in a row.