Informix accused of insider trading

Lawsuits lodged after board members sell shares before profit warning

Informix has been accused of alleged insider trading and class action suits after documents were filed over the sale of shares prior to the company?s profit warning.

According to documents filed at the US District Court of the Northern District of California, the Informix board ditched a majority of its shareholdings before the company?s profit warning on 1 April. The lawsuits alleged that the amount and timing of the stock was ?unusual? and that ?insiders took advantage of the inflated price of Informix? stock to sell more than 84,000 shares for proceeds of over $20 million.

The most ?unusual? sales were by Michael Stonebraker, Informix chief technology officer, who undertook 12 separate transactions in the month of February, one month before the supplier closed Q1.

Informix CEO Phil White, and Howard Graham, chief financial officer, sold 88 and 96 per cent of their total stock during and before 1996. Graham left Informix in December 1996.

The move came as Informix moved to quash rumours that it would have to slash its workforce by more than the previously announced figure of 100. Sources have estimated that Informix needs to cut 600 staff but is likely to make further redundancies over a period of time. Barbara Stanley, Informix UK marketing director, denied there would be further job cuts.

But Mitchell Kertzmann, Sybase CEO, said: ?I was shocked at the 100 number and I don?t even think 600 is enough. It?s a cost versus revenues issue. We took $130 million out of our annualised cost base, but I would reckon Informix needs to take out twice that,? said.

?The lesson you learn is that you need to make redundancies once, because if you only do a few at a time, no one feels secure in their job. It?s always best to do more than you think you need.?