Last Judgment Recorded in Karcher Suit

A federal judge has recorded the final judgment in the civil lawsuit against Carl N. Karcher and six of his relatives, officially concluding an insider trading lawsuit filed 17 months ago.

In the lawsuit, the U.S. Securities and Exchange Commission accused Karcher, 14 immediate family members and company accountant Alvin DeShano of violating insider trading laws in 1984.

Karcher, who is chief executive of Anaheim-based Karcher Enterprises, and six relatives agreed in July to settle the civil charges by paying a total of $664,000. The defendants did not admit or deny any wrongdoing.

Karcher agreed to pay $332,000, the amount his relatives saved by selling company stock after he allegedly told them that the firm was about to report a dramatic drop in earnings. The Karcher family members also agreed to pay another $332,000. The money must be paid by Oct. 12.

Karcher will pay his fine to the federal government. The others must pay those who lost money because of their trades.

Most of the relatives traded through brokers, who acted as principals for their own companies’ accounts, explained SEC attorney Karen Matteson. So the bulk of their repayment will be made directly to Bateman Eichler, Hill Richards Inc.; Montgomery Securities; and Prudential Bache Research, Matteson said.

In July, DeShano agreed to pay a total of $24,792 to settle the civil case against him. Karcher’s son, Carl Leo Karcher, was fined $10,500 last fall for illegal trading. Six other family members, including company President Donald Karcher, settled with the SEC in February by agreeing to pay $187,560. Civil charges against Margaret Karcher, wife of Carl N. Karcher, were dropped earlier this year.