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SEC files insider trading charges against former SemGroup executive
By Angela McDaniels
Tacoma, Wash., Oct. 26 - The Securities and Exchange Commission said it filed a civil action on Friday alleging that Don N. Spaugy, the former vice president of financial services at SemGroup, LP, engaged in insider trading in the securities of SemGroup Energy Partners, LP.
Spaugy has consented, without admitting or denying the allegations in the complaint, to a permanent injunction against future violations of the anti-fraud provisions of the Securities Exchange Act and to pay disgorgement, prejudgment interest and penalties totaling $138,226.
At the time of Spaugy's trading, SemGroup was SemGroup Energy Partners' parent company and its largest source of revenue.
According to the SEC's complaint, between late May 2008 and the morning of July 15, 2008 and in the course of his employment at SemGroup, Spaugy learned that SemGroup was in a liquidity crisis.
The complaint further alleged that on July 15, 2008 and July 16, 2008 Spaugy sold 4,500 SemGroup Energy Partners units at an average price of $23.28 each while in possession of this material, nonpublic information.
On July 17, SemGroup Energy Partners publicly announced that SemGroup was experiencing liquidity issues and considering bankruptcy, causing the price of its units to drop well below Spaugy's average sale price.
The timing of Spaugy's trades allowed him to avoid losses of $67,424.
The suit was filed in the U.S. District Court for the Northern District of Oklahoma, according to an SEC news release.
SemGroup, a Tulsa, Okla., privately held limited partnership that provides midstream services to North America's energy industry, filed for bankruptcy on July 22, 2008. Its Chapter 11 case number is 08-11525.
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