Two men charged with insider trading in the stock of Rochester Community Savings Bank will pay the government $86,500 as part of a settlement with the Securities and Exchange Commmission.
Martin E. Slater and Peter F. Mancuso agreed Feb. 7 to give up their profits and pay additional fines for their roles in the illegal trading of 58,500 shares of the Rochester, N.Y.-based thrift's stock by six individuals.
Mr. Slater, who bought 4,500 shares, will pay just under $50,000. Mr. Mancuso, who purchased 3,500 shares, will pay a little less than $37,000.
The defendants consented to the formal orders by U.S. District Court Judge Albert V. Bryan Jr. without admitting or denying SEC charges. Two other defendants, Gerald R. Sigal and Frank J. Vega, had settled with the SEC when the suit was filed in December.
SEC officials say they will proceed with the lawsuit against the two remaining defendants - Thomas J. Farrell, a former director of the thrift who is an executive at Gannett Co., and Kenneth R. Vasile, president and owner of Vasile Construction Corp. in Rochester.
According to the lawsuit, the trading was coordinated by Mr. Farrell - then a board member - and occurred in early 1993 while the $3.47-billion- asset thrift was in merger talks with Buffalo-based First Empire State Corp.
Mr. Farrell, using his knowledge of the talks, allegedly purchased 6,500 shares of the company's stock and tipped off the other defendants about the negotiations, urging them to buy stock.
All purchases occurred before the thrift announced on May 5, 1993, that it had received an unsolicited merger offer.
Mr. Farrell reportedly kept the other defendants informed about the progress of the talks and then warned them when talks began to fall through.
The defendants sold all their shares before the thrift announced on June 2, 1993, that it would remain independent. The scheme netted the six more than $410,000, according to SEC documents.