in

21 December 2004 – LAWFUEL – First with law news – The former control…

21 December 2004 – LAWFUEL – First with law news – The former controller of a Ventura County manufacturer of microwave communications equipment was charged today with insider trading for selling hundreds of thousands of dollars worth of company stock while concealing from the public the fact that the company was losing money.

Barry Richard Kusatzky, who was the controller of California Amplifier, Inc., a high-tech company that was based in Camarillo, has agreed to plead guilty to two federal charges of securities fraud. California Amplifier, which is now known as CalAmp Corp., is currently located in Oxnard and is publicly traded on NASDAQ under the ticker symbol CAMP. Kusatzky is the only company official implicated in the charged scheme.

In court documents filed this morning, Kusatzky admits selling 15,000 shares of the company’s stock based on material, non-public information. In late 1999, Kusatzky learned, during the course of his duties as controller, that California Amplifier’s expenses were far higher than anticipated. In order to hide these expenses, Kusatzky altered company financial records. As a result, the company, in its public disclosures, indicated that it was profitable, when, in fact, it was losing money.

In December 1999, Kusatzky exercised vested options to purchase 15,000 shares of California Amplifier stock. On January 6 and January 20, 2000, he sold these shares based on the material, non-public information that he had obtained regarding the true financial state of the company. The sales of this stock resulted in total proceeds for defendant Kusatzky of approximately $463,500 and, the investigation revealed, a gain of more than $350,000.

Kusatzky, a 53-year-old resident of McHenry, Illinois, is expected to enter his guilty pleas in United States District Court in Los Angeles early next year. Kusatzky has agreed to plead guilty to two counts of insider trading. Assuming that the court accepts the plea agreement filed today, Kusatzky faces 18 to 27 months in federal prison and potential fines.

This case is the result of an investigation by the Federal Bureau of Investigation.

British MP George Galloway and his opponent the Daily Telegraph will leave no stone unturned to sort out what could be a spectacular libel case.