LOCAL'S FEATURED IN WSJ

By Nathalie Tadena

The Securities and Exchange Commission has charged eight residents in the Griffin, Ga. area for their involvement in an insider trading ring that generated more than $500,000 in illegal profits based on nonpublic information about the acquisition of Chattem Inc. by Sanofi-Aventis SA (SNY).

The SEC alleges that accountant Thomas D. Melvin Jr. exploited confidential information from a client who was on Chattem's board. After Chattem's board was informed that Sanofi-Aventis had made a tender offer to acquire the pharmaceutical company, the client in late 2009 sought Mr. Melvin's professional advice on the financial impact of his Chattem stock options being involuntarily exercised due to a change in control of the company. According to the complaint filed in federal court in Atlanta, the board member made clear to Mr. Melvin during their private conversations that the topic of discussion was confidential. The board member shared the likely increase in stock price from the pending acquisition as well as its potential timing, the SEC said.

The SEC alleges Mr. Melvin tipped four of his friends and associates, C. Roan Berry, Michael S. Cain, Joel C. Jinks and R. Jeffrey Rooks, who traded on the confidential information ahead of the public announcement of the merger. The SEC also alleges that Mr. Berry tipped his friend Ashley J. Coots, who in turn tipped his friend Casey D. Jackson. Mr. Cain allegedly also tipped his friend Peter C. Doffing, the SEC said.

Messrs. Berry, Coots, Jackson and Rooks agreed to settle the SEC's charges and return their profits plus interest and penalties for a combined total of more than $175,000. The four men did not admit or deny the allegations.

The SEC said it will proceed with its litigation against Messrs Melvin, Cain, Doffing and Jinks.

The lawyers for Messrs. Melvin, Cain and Jinks were not immediately available for comment. Mr. Doffing's lawyer, Craig Gillen, declined to comment.

Sanofi-Aventis completed its acquisition of Chattem, which provides over-the-counter products such as Allegra, Gold Bond and Icy Hot, in March 2010.

-Write to Nathalie Tadena at nathalie.tadena@dowjones.com