SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) - SEPTEMBER 6, 1996
ROYCE LABORATORIES, INC.
(Exact Name of Registrant as Specified in Charter)
FLORIDA 34-015178A 59-2202295
(State or Other Jurisdiction (Commission (IRS Employer of
Incorporation) File Number) Identification No.)
5350 NW 165 AVENUE, MIAMI, FLORIDA 33014
(Address of Principal Executive Offices) (Zip Code)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (305) 624-1500
Not Applicable
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(Former Name or Former Address; if Changed Since Last Report)
Page 1 of 3 pages.
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ITEM 5. OTHER EVENTS.
On September 6, 1996, the Company became aware of the filing of a
Complaint for injunctive and other civil relief (the "Complaint") by the U.S.
Securities and Exchange Commission ("SEC") against three of the Company's
employees who allegedly traded securities of the Company while in the possession
of material non-public information. The Complaint also names as defendants three
other persons who allegedly traded securities of the Company based upon material
non-public information provided to them by one of the Company employee
defendants.
The Complaint alleges that Company employees Abul Bhuiyan, Nilkanth
Patel and Hasmukh Patel violated Section 10b of the Securities Exchange Act of
1934 (the "Exchange Act") by purchasing and, in the case of Messrs. Patel and
Patel selling, shares of the Company's common stock while in the possession of
material non-public information. The alleged improper purchases and sales
occurred in September 1991 and April 1992, respectively. The suit also alleges
that all of the defendants except Mr. Bhuiyan violated Section 17(a) of the
Securities Act of 1933, as amended (the "Securities Act"), by reason of their
purchases and sales.
The suit seeks as to all defendants injunctive relief enjoining the
defendants from future violations of Section 10b and Rule 10b-5 under the
Exchange Act and, as to all defendants except Mr. Bhuiyan, enjoining them from
future violations of Section 17(a) under the Securities Act. The suit also seeks
disgorgement from all of the defendants except Mr. Bhuiyan. Finally, the suit
seeks penalties under Section 21A(a) of the Securities Act from each defendant
of up to three times his profits gained and losses avoided as a result of the
violations alleged in the Complaint.
After reviewing the allegations in the Complaint, the Company has taken
certain corrective actions which it believes to be appropriate under the
circumstances. These actions were as follows: (i) the Company removed Mr.
Bhuiyan as an executive officer of the Company (although Mr. Bhuiyan remains an
employee of the Company in the research and development department); (ii) the
Company terminated Nilkanth Patel as an employee of the Company; and (iii) the
Company reprimanded Hasmukh Patel, but retained him as an employee of the
Company (Mr. Patel is an analytical research and development manager for the
Company).
The Company has previously reported in its filings with the SEC the
investigation which gave rise to the filing of the Complaint. The Company does
not believe that the outcome of this matter will have a material adverse impact
on the Company, its business, financial position or results of operations.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROYCE LABORATORIES, INC.
September 17, 1996
By: /S/ PATRICK J. MCENANY
________________________________________________
Patrick J. McEnany, President and Chairman of the
Board
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