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Don Spaugy is accused of insider trading and avoiding losses of $67,424, according to the SEC complaint filed in Tulsa federal court. Spaugy, who was SemGroup's vice president of financial services, allegedly sold all of his 4,500 units in the subsidiary, also called SGLP, on July 15-16.
"Between late May 2008 and the morning of July 15, 2008, Spaugy learned the SemGroup was in a liquidity crisis driven by massive margin calls on its wrong-way bets in the commodities and futures markets," the complaint reads. "Spaugy used confidential company information for his own purposes when, based on that information, he sold his SGLP securities."
The value of SGLP units plummeted from about $21 to $11 on July 17, when the public SemGroup confirmed the parent company's liquidity crisis. The stock fell to about $8.30 per unit on July 18, according to reports.
The complaint against Spaugy is the second SEC litigation involving insider trading of SGLP units in the past six months, but the first involving a SemGroup employee. In April, Tulsa attorney Matthew J. Browne was charged with cashing in more than $80,000 worth of SGLP stock after hearing insider information about the parent SemGroup's cash-flow crisis. Brown had served as counsel for Bank of Oklahoma, one of SemGroup's key lenders over the years.
Without admitting or denying the SEC charges, Browne consented to pay the $81,773 he saved in selling the units, plus prejudgment interest of $1,505.98 and a penalty of $81,773, according to reports.
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