BREAKING: Knall deal includes 1-year suspension

Star money manager David Knall has agreed to a one-year suspension to settle Securities and Exchange Commission charges that he committed insider trading in Galyan’s Trading Co. stock three years ago.

Under the settlement, which the SEC announced today, Knall, 63, did not admit or deny wrongdoing. The deal also calls for him to make payments totaling $123,865.

That includes $55,281 – which represents losses the SEC says Knall avoided by making a trade in his personal account using nonpublic information. The trade occurred immediately before Galyan’s announced in mid-2004 that it was being acquired by Dick’s Sporting Goods. He also agreed to pay $13,303 in interest and a civil penalty of $55,281.

Knall, who works out of a Stifel Nicolaus office on the north side, is one of the nation’s top-producing investment managers. His clients include many of the wealthiest families in central Indiana, including the Simons.

Knall told IBJ this afternoon that settling was an “agonizing decision. You have to understand this did not involve client moneys. It was my own account.”

His attorney, Richard Morvillo, said the suspension is expected to start in a few weeks. In his absence, Knall’s 30-person team at Stifel Nicolaus will continue to handle clients’ accounts.

Knall said he decided to settle because “I just wanted to get it behind me.”
In stories over the past three years, IBJ reported that Knall was under investigation for insider trading in Galyan’s. The stories noted that his son Jamie, who works with him at Stifel Nicolaus, also was under investigation.

The SEC has taken no action against Jamie. Morvillo said no action is anticipated against Jamie.

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