Nothing like getting the bad news out on your own terms. AmeriCredit scooped the SEC yesterday, issuing this odd press release "preannouncing" an insider trading case against five AmeriCredit employees for insider trading, and against the company itself as a "controlling person" of those persons.

AmeriCredit announced that it believes the SEC has concluded its investigation of the five employees, who the SEC asserts (will assert?) "traded in shares of the Company's common stock in January 2002 while purportedly in possession of material, non-public information about the Company -- prior to the release of its financial results for the quarter ended December 31, 2001."

AmeriCredit further announced that the SEC "asserts that AmeriCredit is liable for a civil penalty under Section 21A of the Securities Exchange Act of 1934 as a 'controlling person' of those employees," and that the company has offered to pay a civil penalty of $100,000 as full settlement. The company stated in its press release that it neither admitted nor denied such liability. AmeriCredit stated that it "believes that the SEC has accepted this offer and that they will be making an announcement soon to conclude this issue." According to an article in the Fort Worth Star Telegram, the SEC declined to comment yesterday, saying that it had not released any public disclosures in the case.

Beyond the unusual nature of the preannouncement, the alleged (usually its the plaintiff doing the alleging, but not here!) claim and settlement with AmeriCredit as a controlling person is notable. It is rare to see controlling person claims against the company itself for the trading of employees, as the standard for controlling person liability is quite high: that the company "knew or recklessly disregarded the fact that such controlled person was likely to engage in the act or acts constituting the violation and failed to take appropriate steps to prevent such act or acts before they occurred...."

When and if the SEC brings this action, issuers should pay close attention to the facts alleged against AmeriCredit to be sure that they are not similarly exposed. Did management know/disregard the trading? Did the company lack any insider trading policy? We'll see soon, apparently.