Thomas J. Farrell, 50, president of Gannett New Media, has been placed on administrative leave by the company, pending further investigation of Securities & Exchange Commission charges.
The action came after the SEC filed a lawsuit Dec. 8 in U.S. District Court in Alexandria, Va., alleging that Mr. Farrell tipped off friends about the possible takeover of Rochester (N.Y.) Community Savings Bank, where he is a member of the board. The SEC said the trading yielded more than $410,000 in illegal profits.
"Despite the fact this matter has absolutely nothing to do with the activities of our company, these charges are of great concern to us and we take the matter very seriously," said John Curley, chairman, president and CEO of Gannett, in a statement. Gannett declined to comment further and Mr. Farrell couldn't be reached.
Gannett executive Frank Vega also was named in the SEC complaint; he signed a consent agreement and paid a fine to the SEC.
He no longer will be an executive officer of Gannett, but will continue as president of the Detroit Newspaper Agency, the joint operating agency between Gannett's The Detroit News and Knight-Ridder's Detroit Free Press.
Mr. Farrell was named to Advertising Age's Marketing 100 in 1992 for his work as publisher of USA Today Baseball Weekly in its successful launch. He also is a former exec VP and general manager of USA Today.
Mr. Farrell represents Gannett on the board of San Jose, Calif.-based Interactive Network.
As president of Gannett New Media, Mr. Farrell had been responsible for Gannett new-business and product development, including USA Today Sports Center, USA Today Information Center and USA Today Sky Radio.
But the division is being significantly revamped-though the move is not believed to be related to Mr. Farrell's SEC investigation.
Under Gannett's revised plan, USA Today will develop its own new-media ventures starting with the USA Today Information Network, a separate business unit of the newspaper that will develop online opportunities.
Lorraine Cichowski, 41, becomes VP-general manager of the unit, from director of special projects for Tom Curley, president and publisher of USA Today.
USA Today is phasing out its CD-ROM, book and pager headline service projects, Ms. Cichowski said. It also plans to shut down Sky Radio, its live in-flight radio broadcasts, at the end of the month due to lack of advertiser support.
Gannett also is starting up Gannett Media Technologies, Cincinnati, to develop and market software products for media companies. Its first product is AdLink, a software package that allows local real estate firms to create their own ads and transmit the material directly to newspapers.