Reebock Vice President Agrees to Insider Trading Settlement

WASHINGTON —  An executive of Reebok International Ltd., an athletic footwear company based in Canton, Mass., settled insider trading charges Friday by agreeing to surrender profits and pay a penalty.

The Securities and Exchange Commission, in a complaint filed in U.S. District Court in Boston, accused Robert Slattery, a division vice president of Reebok, of profiting by misusing privileged, non-public information in Reebok’s acquisition of another footwear firm, Avia Group International Inc., based in Portland, Ore.

Without admitting or denying the charges, Slattery agreed to disgorge $11,130 in profits and pay an equal sum in penalties.

Charges Detailed

The SEC said that on Feb. 11, 1987, Slattery purchased 1,000 shares in Avia for $19 each. Shortly after that, he learned that Reebok planned to acquire Avia for about $16 a share.

When Reebok announced the acquisition at $16.35 a share on March 10, Avia stock plunged from $27.50 to $16.50. A day earlier, Slattery had sold his Avia stock for about $26 a share, avoiding a loss of $9,209, the agency alleged.

It also said that on the day before the announcement, Slattery purchased 20 options on Reebok stock, which was trading at $37.37 share, allowing him to buy it later in March and April at $40 a share. Following the announcement, the Reebok price went to $41.62 and Slattery profited by $1,920, the SEC said.

Reebok officials did not immediately return telephone calls for comment.