The United States Security and Exchange Commission in the U.S. District Court of Arizona has filed a complaint against Cavco Industries as well as its former President and CEO Joe Stegmayer and former CFO Dan Urness alleging multiple instances of insider trading in 2017 and 2018 during partnership, merger, and acquisition talks with no fewer than four large organizations in the manufactured housing industry.
Urness and Stegmayer were “aware of Cavco’s Insider Trading Policy prior to 2017 and throughout the period of Cavco’s trading in Skyline, Nobility, Deer Valley, and UMH from March 2017 to October 2018” the complaint states.
The SEC complaint against Cavco was filed Sept. 2, 2021. It brings claims against the Cavco, Stegmayer, and Urness under the antifraud and internal account control provisions of the Securities Exchange Act of 1934. The complaint alleges that Cavco gained $260,459 in relation to the trades, and that Stegmayer saved more than $880,000 sales of Cavco shares prior to the announcement of the SEC investigation.
The SEC seeks an injunction and monetary penalties.
Cavco released a statement on the day the complaint was filed that said “The Company intends to vigorously defend itself against the allegations made by the SEC in the Complaint.”
Stegmayer stepped down as CEO and president in November of 2018 and remained the company’s director of strategic initiatives through January 2020. Urness served as interim CEO prior to Bill Boor assuming the role in April of 2019. Urness remained Cavco’s chief financial officer through February 2021.
First SEC Claim – Against Cavco, Stegmayer
Fraud in the Connection with the Purchase and Sale of Securities Violations of Section 10(b) of the Exchange Act and Rule 10b-5.
Second SEC – Claim Against Cavco
Failure to Devise and Maintain Sufficient Internal Accounting Controls in Violation of Section 13(b)(2)(B) of the Exchange Act.
Third SEC Claim – Against Stegmayer, Urness
Aiding and Abetting Cavco’s Failure to Devise and Maintain Sufficient Internal Accounting Controls in Violation of Section 13(b)(2)(B) of the Exchange Act.
Fourth SEC Claim – Against Stegmayer, Urness
Circumventing and Failing to Implement Internal Accounting Controls in Violation of Section 13(b)(5) of the Exchange Act.
Fifth SEC Claim – Against Stegmayer, Urness
Misleading the Auditor in Violation of Rule 13b2-2 under the Exchange Act.
Sixth SEC Claim – Against Stegmayer
Fraud in the Connection with the Purchase and Sale of Securities In Violation of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder.
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