The agency said Schvacho gleaned nonpublic information while then-Comsys Chief Executive Officer Larry Enterline, who was also a friend. called other Comsys executives to discuss the acquisition and through confidential, merger-related documents to which Schvacho had access.
U.S. District Court Judge William Duffy Jr., however, found the SEC’s evidence against Schavacho was circumstantial and the agency didn’t provide sufficient proof that he possessed nonpublic information before trading.
Schvacho’s attorney, Ross Albert of Morris, Manning & Martin, said the same concerns the judge had with the agency’s case were the same concerns his client raised months before it was filed in 2012.
“It should never have gone to court,” Albert said. “The judge repeatedly noted the obvious gaps and contradictions in the SEC’s theory of the case, and specifically found that both the testimony of Mr. Schvacho and Larry Enterline, the alleged source of inside information, was credible.”