Stock market regulators are suing a Mount Pleasant man, alleging that he played a central role in an insider-trading scheme while he worked as a high-ranking executive at a global electronics company.
The Securities and Exchange Commission said in a lawsuit filed in federal court in Illinois that Ralph J. Pirtle, 50, who lives in an upscale neighborhood in RiverTowne Country Club, shared corporate secrets with a business associate, who then used that information to buy and sell stocks of three public companies.
The flurry of trading by Morando Berrettini, a lawyer and real estate broker from Lake Forest, Ill., generated about $240,600 in profits from December 2005 to September 2006, according to the complaint.
The SEC is requesting a court order to disgorge any ill-gotten gains. It also is seeking unspecified civil penalties against the two men, who have not been charged with any criminal wrongdoing.
Pirtle could not be reached for comment and has not yet filed a response to the allegations. His attorney, Ross Pearlson, said this is a case of the SEC "overreaching" its authority.
"Mr. Pirtle did nothing wrong. He was only performing his duties on behalf of his employer," Pearlson said.
"We believe he will be fully vindicated and cleared of all charges at the end of the day."
Pirtle was director of real estate in North America for Royal Philips Electronics from 2001 until mid-2006. In that role, he was privy to highly sensitive information about business acquisitions the Dutch company was reviewing but had not announced, according to the SEC.
In three instances, all involving publicly traded businesses, Pirtle tipped off Berrettini as part of a "quid pro quo relationships between the two," the SEC said.
After learning that Philips was interested in buying Lifeline Systems Inc., Invacare Inc. and Intermagnetics Corp, Berrettini snapped up shares in the three medical-related firms before the deals were announced to the public, according to the SEC.
The SEC said Pirtle met Berrettini, 66, in the early 1990s and that they maintained a close business relationship. Berrettini's Berco Realty was named a "preferred real estate vendor" for Philips at Pirtle's request.
The two men also had been involved in "significant financial side-dealings" starting around 2003, according to the lawsuit.
"Had those financial side-dealings been known to, or disclosed to Philips, Pirtle would have been subject to termination by Philips," the lawsuit stated. David Wolf, regional director of corporate communications for Philips Electronics North America, said the company declined to comment.
The SEC said Berrettini also "made a series of payments to third parties on Pirtle's behalf" between August 2003 and January 2007. The 17 cashier's checks, which Berrettini has claimed were loans, ranged from $1,266 to $36,500, for a total of about $226,000.
"Pirtle used the money to pay for, among other things, cars, trips to Las Vegas and gambling," the SEC said.
The agency added that Pirtle had "no credible reason" to borrow such relatively small sums based on his own personal cash holdings.
"In fact, these payments were not loans, but were payments Berrettini made to Pirtle in return for the business opportunities Pirtle directed to Berco and for the inside information Pirtle gave Berrettini that Philips had targeted Lifeline, Invacare, and Intermagnetics for acquisition," the SEC alleged.
Berrettini's trading in the Lifeline shares prompted the National Association of Securities Dealers to asked Pirtle whether he knew the real estate broker. Pirtle indicated he did in a May 2006.
Philips then quizzed him to learn "how Berrettini might have come to learn about the Lifeline acquisition," the SEC said.
"Pirtle's answers were intentionally deceptive and misleading," according to the lawsuit.
Pirtle's professional credentials are impressive. He graduated from Southern Methodist University and earned a master's degree in business administration from the prestigious Kellogg School of Management at Northwestern University. He also was a charter member of the Industrial Asset Management Council, a national trade group, and has served on the board of the University of California at Irvine's master's degree program in corporate real estate.
Pirtle left Philips in May 2006 to take a similar position at Panasonic North America Corp. but is no longer with that company, according to the SEC. He bought his RiverTowne home in March 2007 for $612,500, Charleston County records show.