SEC investigates trading of InVision

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Saturday, May 1, 2004

NEWARK, N.J. - Two days after General Electric announced its plans to acquire InVision Technologies, the U.S. Securities and Exchange Commission began investigating alleged insider trading in options on InVision’s stock.

On March 16, the U.S. District Court for the Southern District of New York granted the commission’s request for a temporary restraining order freezing $2 million in assets of unidentified purchasers of call options on shares of InVision. That amount was increased to $3 million in assets the following week, after the SEC uncovered evidence of additional suspicious trade activity.

The investigation focuses on trades that occurred in the six days leading up to GE’s public acknowledgment of the sale. Regardless of the inquiry, GE has continued with its plans to move forward with its $50-per-share purchase of the manufacturer of explosive-detection systems - another acquisition that marks the company’s growing presence in the security sector.

“It’s obviously too early to say anything definitive,” said Peter Stack, a spokesperson for GE. “But we don’t anticipate that the closing schedule for this transaction will be affected by the SEC inquiry.”

Stack also mentioned that GE is confident the allegations will not focus on GE affiliates.

InVision spokesman Stan Neve said that the company is cooperating with investigators with the ongoing investigation.

“We’re helping the SEC in any way that we can,” Neve said.