Working In The Fort Lauderdale Office Of The Same Accounting Firm

Alina Welt is a resident of Deerfield Beach, Florida. During the relevant time period, Alina Welt worked in the employee benefits sections of two large public accounting firms. Alina Welt is a non-practicing attorney and an inactive member of the New Jersey bar. She and Andrew Welt have been married since 1994.  Andrew Welt is a resident of Deerfield Beach, Florida. During the relevant time period, he was a self-employed certified financial planner and was registered with the state of Florida as an investment adviser. Prior to that time, Andrew Welt worked as a stockbroker.
 Bruce A. Welt is a resident of Gainesville, Florida and he is Andrew Welt’s younger brother.  Bruce Hirschhorn is a resident of Boonton, New Jersey and is self-employed. Bruce Hirschhorn and Andrew Welt have been friends since childhood.

The Trading Scheme  In 1996, Alina Welt began working as a benefits consultant in the employee benefits department of a large public accounting firm. Approximately one year later, Alina Welt and her husband, Andrew Welt, moved to Florida and Alina Welt began working in the Fort Lauderdale office of the same accounting firm. In the summer of 2000, Alina Welt left that firm and joined the employee benefits group of another large public accounting firm. While at the
two accounting firms, Alina Welt occasionally learned material nonpublic information concerning tender offers, mergers, or other extraordinary corporate transactions involving clients of her employers, which she had a duty to keep confidential. Alina Welt signed agreements at both firms pursuant to which she agreed to keep confidential any information that she learned from her employer and its clients. Renex Corp.

In December 1999, Renex Corp., a Florida corporation headquartered in Coral Gables, Florida, was a client of Alina Welt’s employer and an acquisition target of National Nephrology Associates, Inc. On Wednesday, December 15, 1999, Alina Welt was assigned to conduct due diligence on the effect of the proposed transaction on Renex’s pension plans. As a result, Alina Welt learned material nonpublic information relating to a possible tender offer for
Renex shares, which Alina Welt had a duty to keep confidential. On that same day, December 15, 1999, Alina Welt, in breach of a fiduciary duty owed to her employer and to her employer’s client, misappropriated material nonpublic
information and tipped her husband, Andrew Welt, by communicating information about the transaction to him. Andrew Welt knew or should have known that the information had beenFurther, that same day, December 15, 1999, Andrew Welt purchased 2,000 shares of Renex common stock in a joint brokerage account that he shared with Alina Welt.

Additionally, Andrew Welt tipped his brother, Bruce Welt, and his friend, Bruce Hirschhorn, to the potential
tender offer for Renex. Bruce Welt and Bruce Hirschhorn both knew, or should have known, that the information had been disclosed to them in breach of a fiduciary duty or other relationship of trust and confidence. Further that same day, December 15, 1999, Bruce Welt purchased 1,000 shares of Renex common stock and Bruce Hirschhorn purchased 3,900 shares of Renex common stock. Over the next several days, Andrew Welt purchased an additional 1,000 shares of Renex common stock and Bruce Hirschhorn purchased an additional 8,100 shares of Renex common stock.

On December 28, 1999, National Nephrology Associates announced that it had commenced a tender offer to acquire Renex shares for $10.00 per share. Following this announcement, the market price of Renex common stock increased by 54 percent. Following the tender offer announcement, Andrew Welt sold his Renex shares, making a profit of $8,812.50; Bruce Hirschhorn sold his Renex shares, making a profit of $36,243.75; Bruce Welt tendered his
Renex shares, making a profit of $3,562.50. Travel Services 13. In January 2000, AirTours, Plc. a United Kingdom company and a client of Alina Welt’s employer, was interested in making a tender offer for Travel Services International, Inc., a Florida corporation, headquartered in Delray Beach, Florida. On or about, Friday, January 28, 2000, one of Alina Welt’s supervisors and several co-workers in her employer’s Fort Lauderdale office were assigned to conduct due diligence on Travel Services over the upcoming weekend, Saturday and Sunday, January 29 and 30, and Alina Welt learned of the possible tender offer for Travel Services shares.

That same day, January 28, 2000, Alina Welt tipped Andrew Welt to the possible tender offer for Travel Services, and Andrew Welt tipped Bruce Hirschhorn to the possible tender offer. On January 28, 2000, Hirschhorn placed an order to purchase 1,000 shares of Travel Services at approximately 5:00 p.m., but the trade was not executed. The following
Monday, January 31, 2000, Hirschhorn purchased 2,400 shares of Travel Services. The next day, Hirschhorn purchased an additional 4,600 shares of Travel Services. On February 21, 2000, AirTours announced a tender offer to acquire Travel Services shares for $26 per share. Following this announcement, the market price of Travel Services common stock increased 46 percent. Bruce Hirschhorn tendered his Travel Services shares on March 29, 2000, making a profit of $72,400.