Dec. 18 (Bloomberg) -- Former Home Diagnostics Inc. Chief Executive Officer and Chairman George Holley avoided prison when he was sentenced to three years of probation for insider trading.
Holley, 72, was sentenced yesterday in federal court in Trenton, New Jersey, where he pleaded guilty on Aug. 8 to two counts of securities fraud in his trial’s eighth day. Holley faced between 33 and 41 months in prison under advisory sentencing guidelines, according to his attorney, Kevin Marino. U.S. District Judge Joel Pisano also fined him $260,000.
Pisano had dismissed some of the charges at trial after prosecutors rested their case, Marino said. Holley admitted tipping his cousin and a friend that Osaka, Japan-based Nipro Corp., a maker of medical equipment, would buy his company. Prosecutors said he told them to buy Home Diagnostics stock three weeks before the merger was announced.
“We always felt that a probationary sentence was appropriate in this case, and we are very gratified that that sentence was ultimately imposed,” Marino said. “Mr. Holley has lived an extraordinary life marked by generosity of spirit and philanthropy. He regrets his foolish mistake.”
Matthew Reilly, a spokesman for U.S. Attorney Paul Fishman, declined to comment on the sentence.
Nipro bought the company for $215 million in February 2010. Shares of Home Diagnostics, based in Fort Lauderdale, Florida, rose 89 percent after the announcement. The subsidiary, which makes blood glucose monitoring systems and disposable supplies for diabetics, is now known as Nipro Diagnostics.
One of the people that Holley admitted tipping was Phairot Iamnaita, of Hangdong, Chiang Mai, Thailand. Holley, of Norwalk, Connecticut, was arrested in January 2011 and charged with Iamnaita. Prosecutors dismissed the charges against Iamnaita when they indicted Holley for a second time in May.
Iamnaita was a “close personal acquaintance” of Holley who “regularly socialized and vacationed” with him, according to the Federal Bureau of Investigation’s arrest complaint. The two invested in business ventures in Thailand, the FBI said.
From 1985 to March 2010, Holley was chairman of Home Diagnostics, according to the Securities and Exchange Commission. The SEC sued Holley, Iamnaita and a third man. A judge administratively closed that lawsuit so that it wouldn’t interfere with the criminal case.
The case is U.S. v. Holley, 11-cr-66, and the SEC case is Securities and Exchange Commission v. Holley, 11-cv-205, both in U.S. District Court, District of New Jersey (Trenton).
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