PA business lobbyist cleared in SEC insider-trading case

Frederick J. Anton 3d, chairman of the Pennsylvania Manufacturers Association and former chairman of workers' compensation insurer PMA Capital Corp., has been cleared of insider-trading charges by Federal Judge Juan R. Sanchez in Philadelphia.

The April 23 ruling was a defeat for the Securities and Exchange Commission, which had accused Anton of leaking information about the company's deteriorating financial health in 2003 to retired PMA executive David L. Johnson, enabling Johnson's family to dump PMA stock before the company made public its problems, and helping the Johnsons to avoid $382,000 in losses. The SEC made Johnson repay double that amount, and he agreed to testify against Anton. The SEC had sought over $1 million from Anton.

Sanchez wrote in his opinion that neither Johnson nor Anton were "reliable" about their 2003 conversation, because both of them changed their stories. But he also found no proof that Anton actually had possessed the information he was accused of passing to Johnson when they spoke in 2003. Sanchez added, "Because there is no evidence Anton received a personal benefit from the alleged disclosure, there can be no insider trading violation." Anton was represented by Philadelphia lawyer Robert E. Welsh Jr. of Welsh & Recker.