Jay S. Laveson

Litigation Release No. 17596 / July 2, 2002

SEC v. Jay S. Laveson, Civ. Action No.02 CV 11336 GAO (D. Mass., filed July 2, 2002)

SEC Charges Jay S. Laveson, a Former Employee of IDX Systems, Inc. with Insider Trading in Three Stocks

The Securities and Exchange Commission today announced the filing of a civil injunctive action against Jay S. Laveson for illegal insider trading in the securities of IDX Systems, Inc., Daou Systems, Inc., and Medical Manager Corporation. The complaint alleges that Laveson, a resident of Atkinson, New Hampshire and a former senior financial analyst at IDX, made an illegal profit of $128,524 when he traded while in possession of material nonpublic information about the three companies. Laveson obtained this information during the course of his employment at IDX. Laveson agreed to settle this matter by consenting, without admitting or denying the allegations, to the entry of a judgment enjoining him from future violations of the antifraud provisions of the federal securities laws, and ordering him to disgorge the sum of $128,524. A civil penalty was not imposed and pre-judgment interest was waived based on Laveson's demonstrated inability to pay.

The Commission's complaint alleges that from March 2 through March 4, 1999, Laveson, while employed at IDX's South Burlington, Vermont headquarters, sold and shorted IDX stock. At the time of his IDX trades, Laveson was in possession of material nonpublic information that IDX's earnings for the quarter ended March 31, 1999, would be lower than expected. IDX publicly announced the negative earnings news in a press release on March 5, 1999. The complaint further alleges that between September 1998 and February 1999, Laveson traded in the securities of Daou and Medical Manager while in possession of nonpublic information concerning IDX's merger negotiations with both companies. Laveson came into possession of the merger information while performing work as a member of the IDX due diligence teams that reviewed the potential transactions with Daou and Medical Manager. The complaint also alleges that on February 5, 1999, Laveson shorted Daou's stock, in anticipation of a decline in its price, after learning from Daou's chief operating officer that the company expected to have a revenue shortfall for the quarter ended December 31, 1998.

The Commission's complaint alleges that by engaging in insider trading, Laveson violated the antifraud provisions of the federal securities laws, including Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

For further information, contact: Kate Poverman, Assistant District Administrator at (617) 424-5936