ATLANTA, Jan. 11, 2012 /PRNewswire/ -- Attorneys for business executive and philanthropist Parker H. "Pete" Petit are calling on the Securities and Exchange Commission (SEC) to dismiss a civil complaint the Commission brought against Mr. Petit.
The SEC has alleged that Mr. Petit provided information to a friend who made two purchases of Matria Healthcare stock in 2007. The purchases occurred prior to the sale of Matria in 2008 to Inverness Medical Innovations, Inc. (now known as Alere, Inc.) Mr. Petit was the Chairman and CEO of Matria. Mr. Petit is not alleged to have received any money stemming from the friend's purchase.
Mr. Petit's legal counsel said that the Commission's case is without merit, and that Mr. Petit passed a polygraph test proving he did not provide inside information. The polygraph was administered by a polygraph expert who is the FBI's former chief polygraph examiner and was previously used by the SEC itself.
"We gave the SEC the results of the expert's polygraph test as specific evidence that Mr. Petit was truthful in stating he did not provide inside information, and that the SEC's claims are groundless," said Aaron Danzig, of the law firm Arnall Golden Gregory. Mr. Danzig, a former federal prosecutor, said that the Commission responded to Mr. Petit's polygraph results by requesting that Mr. Petit submit to a second polygraph conducted by the SEC. Mr. Petit agreed, on the condition that the Commission declines any enforcement action when Mr. Petit passes the second test. Rather than follow through on its request, the SEC instead chose to sue Mr. Petit.The SEC's investigation was born out of a friendship between Earl Arrowood, a retired Delta Air Lines pilot, and Mr. Petit, who is also an experienced pilot, as both men fly together occasionally. The facts do not support the SEC's allegations that Mr. Petit passed inside information to Mr. Arrowood in October and December 2007:
- The complaint suggests that Mr. Petit passed inside information to Mr. Arrowood just prior to Mr. Arrowood's October 25, 2007 purchase of Matria stock. In fact, they had not spoken for two weeks nor flown together for almost three weeks prior to that date.
- In December 2007, Mr. Arrowood was assisting Mr. Petit in purchasing a newer airplane. As a result, Mr. Petit and Mr. Arrowood had numerous telephone calls during December and January about aircrafts. Unbeknownst to Mr. Petit, Mr. Arrowood purchased Matria stock in December 2007.
- During that same period, Matria's Board of Directors was exploring the possibilities of the sale of Matria. On January 28, 2008, the Company publicly announced it was being acquired.
- Mr. Arrowood's profit from the sale of this stock six months after the announcement of the acquisition was $9,900, not $94,000 as alleged by the SEC.