Ex-Trimedyne Exec Settles With SEC

Trimedyne Inc.’s former controller and her brother and sister have agreed to pay nearly $166,000 to settle charges they traded Trimedyne’s stock based on secret knowledge that the surgical laser company had received government approval for a prostate treatment, regulators said Wednesday.

The Securities and Exchange Commission alleged Michelle Nguyen, 39, of Orange was controller of Trimedyne when she learned the Irvine company had received notice from the U.S. Food and Drug Administration that its medical laser treatment for enlarged prostates would soon be cleared for use.

Before the company announced the FDA clearance, Nguyen bought 4,100 shares of Trimedyne, the SEC alleged. She also tipped her sister, Lisa Nguyen of Tustin, who bought nearly 5,000 shares, and her brother, Hao Vu of Lake Forest, who bought 4,000 shares, according to the SEC complaint filed in U.S. District Court in Los Angeles.

Trimedyne was not charged in the case.

The trio made a total of $82,968 when they sold their stock after the company announced the FDA clearance March 19, 1996, the SEC said.

Trimedyne’s shares more than tripled to $10.50 from $3.44 the day of the announcement and shot up to $16.25 during the session the next day.

Michelle Nguyen agreed to pay $83,324 in fines and gains, her sister agreed to pay $30,610, and Vu said he would pay $52,000 in penalties and restitution, the SEC said.

They neither admitted nor denied the allegations. Their attorneys could not be reached for comment.

Trimedyne fired Nguyen after it learned of her alleged activity, the company’s chief financial officer, Shane Traveller, said in June when the SEC filed the case.

The SEC’s case against Raymond Kolts, a Glendale attorney who represented Trimedyne and allegedly traded on inside information relating to the company, is still pending, the SEC said.

Paul De Pasquale, an attorney for Kolts, had no comment on the case.

Trimedyne’s shares closed Wednesday at $2.19, down 6 cents, in Nasdaq trading.