Newspaper article The Florida Times Union

SEC Settles Case against Former Local Trader

Newspaper article The Florida Times Union

SEC Settles Case against Former Local Trader

Article excerpt

Byline: Mark Basch, Times-Union business writer

The Securities and Exchange Commission has settled an insider trading case against a former Jacksonville stockbroker who was accused of using privileged information to sell stock and avoid $25,000 in losses for a client.

In a settlement filed last month in U.S. District Court in Jacksonville, Henry T. Blackstock, without admitting or denying the allegations, agreed to a final judgment enjoining him from violating certain federal securities laws. The SEC said, based on Blackstock's financial condition, he was not ordered to pay any money.

The case involved a Tennessee-based company called American HomePatient Inc., which had a sharp drop in its stock price in September 1998 after announcing disappointing financial results. Blackstock has served on American HomePatient's board of directors since 1991 and sold 4,000 shares of its stock for a client in the days before the company announced the results, according to a lawsuit filed by the SEC in May 2000.

Blackstock, who now lives in Birmingham, Ala., did not return phone calls to his home and office. Blackstock was a long-time Jacksonville stock broker who ran his own firm in the 1980s called Blackstock & Co. He was living in Ponte Vedra Beach at the time of the stock sales, according to the suit.

The settlement was reached as the case was ready to go to a jury trial in June. Blackstock's attorney in Birmingham, Kenneth Simon, said he thought he could win if the case went to trial, but because of the risks of taking the case to a jury he advised Blackstock to settle.

"We think this is an honorable conclusion to it," Simon said.

"We really believed in Mr. Blackstock's innocence. I don't think there is any persuasive evidence to the contrary," he said.

American HomePatient's stock traded as high as $10 on Sept. 23, 1998, when, according to the SEC's lawsuit, Blackstock was informed of material, non-public information about certain accounting charges that would take the company from a profit to a loss. …

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