Ex-PDA Engineering Official Is Accused of Insider Trading

LOS ANGELES — A former national sales manager for PDA Engineering in Costa Mesa has been accused by the Securities and Exchange Commission of illegal insider trading in the company’s stock in 1993.

In a civil suit filed this week in U.S. District Court in Los Angeles, the SEC seeks to force Richard J. Smith to pay to the government $138,302. The sum includes $121,668 in profits he received through a series of PDA stock trades he made from April to July, 1993.

Smith, 47, now lives in Nashville, Tenn., but is employed by an Orange County company, the suit says. His present employer was not identified.

Smith was a vice president and North American sales manager for PDA from February, 1990, until he was laid off in August, 1994, when PDA was acquired by a privately held company.

He allegedly obtained confidential information in 1993 that PDA’s fourth-quarter financial results would be lower than expected and used that knowledge to sell stock at a profit before the company published its financial statement and the stock value fell.

The SEC alleges that Smith also tipped his father and an associate at PDA of the events and that they took advantage of the insider information to make much smaller profits, totaling $16,634.

The agency’s suit seeks to require Smith to pay that sum to the government as well. The SEC further is seeking a court order barring Smith from future violations of the rules against insider trading.