NEWARK, N.J. (Dec. 22, 4:30 p.m. ET) — Alfred Teo Sr., chairman and CEO of blown film extruder Sigma Plastics Group, has been ordered to pay $49.51 million in the Securities and Exchange Commission's civil lawsuit involving shares of Musicland Stores Corp. stock.
Teo's attorney said he plans to appeal the ruling.
SEC announced that U.S. District Court Judge Susan Wigenton entered a final judgment on the civil case on Dec. 21.
Teo has already paid a $1 million fine and served an 11-month stint in federal prison, in 2007-2008, when he was convicted of criminal charges in the case.
SEC filed the civil lawsuit in U.S. District Court in Newark in 2004. SEC had alleged that Teo failed to disclose the full extent of his ownership in Musicland stock.
Teo was found guilty in a jury verdict in the civil case following a 10-day trial in May.
“Teo lied in his public filings for his personal gain and fraudulently circumvented core disclosure requirements designed to protect investors in public companies,” said George Canellos, director of SEC's New York regional office. “The court's decision sends a strong message that our regulatory framework depends on truthful disclosure, and intentional violations will be appropriately sanctioned.”
Teo, 65, lives in Kinnelon, N.J., and Fisher Island, Fla.
The court ordered Teo and a trust he controls to pay $17,422,054.13 in disgorgement plus $14,649,034.89 in prejudgment interest, and penalties of $17,422,054.13.
In addition to that $49,493,143.15 final judgment, Teo has previously paid $996,782.68 in disgorgement and prejudgment interest for insider trading violations pursuant to a court order in this case on March 15, 2010.
Back in September, the court had ordered Teo to pay $21 million in the civil case, based on purchase amounts and profits. The $49.5 million figure also includes interest and additional penalties.
Mary Mulligan with Friedman, Kaplan, Seiler & Adelman LLP in New York said Teo will appeal the ruling, based on evidentiary rulings at the trial, and disputes over the civil penalties and earnings.
Teo and the trust are being held liable in this case. Sigma Plastics officials have emphasized that the Musicland case in no way involved Sigma and it does not affect or impact the business.