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UPDATE 1-Former J.Crew executive settles SEC insider trading case

Thursday, 25 Oct 2012 | 8:51 PM ET

WASHINGTON, Oct 25 (Reuters) - A former director of store operations for clothing retailer J.Crew Group Inc agreed to pay $128,000 to settle charges that he traded on non-public information ahead of the company's earnings announcements in 2009.

The Securities and Exchange Commission accused Frank LoBue of using information about the company's sales and expenses to purchase 2,300 shares of J.Crew common stock ahead of the company's May 2009 earnings release, which announced better-than-expected results.

LoBue again used sales and expense information to purchase 11,680 shares ahead of J.Crew's August 2009 earnings announcement, the SEC said.

Through the trades, LoBue received around $60,000 in illicit profits, the SEC said. LoBue neither admitted nor denied the allegations, according to the SEC, but agreed to give up $60,735 in profits, an additional $60,735 as a penalty, and $6,749 in interest.

LoBue is 43 and lives in Hoboken, New Jersey, according to the complaint. LoBue did not respond to a request for comment placed through his LinkedIn profile. A J.Crew spokeswoman did not respond to a request for comment.

The SEC said LoBue's employment at J.Crew was terminated in February 2010.

J.Crew became a private company last year after shareholders approved a $2.86 billion takeover deal.