Earlier this week, the SEC announced that it has charged a former Deloitte Tax LLP partner and his wife with "repeatedly leaking confidential merger and acquisition information to family members overseas in a multi-million dollar insider trading scheme."
Robert Khuzami, Director of the SEC's Division of Enforcement said of the alleged scheme, that involved the couple's close relatives across the pond, "[i]n this day and age, whether it's across oceans or across markets, the SEC and its domestic and foreign law enforcement partners are committed to identifying and prosecuting illegal insider trading."
The SEC's complaint alleges that the Deloitte partner, Arnold McClellan and his wife, provided confidential information to relatives in London about his clients' targeted acquisitions of United States companies. The trading tips were provided over the phone or on personal visits and the relatives and others then took financial positions within these companies. The SEC apparently tracked back the timing of these calls and visits with positions taken by relatives and others in companies that were about to be acquired.
Mr. McClellan allegedly "had access to highly confidential information while serving as the head of one of Deloitte's regional mergers and acquisitions teams." His area of practice including tax and related advice in clients' potential acquisitions.
The couple's London relatives, James and Miranda Sanders and his colleagues have been charged by the UK Financial Services Authority, as the scheme involved alleged tipping of information within Mr. Sanders' derivatives firm. These tips resulted in trades with the firm's clients with gains of about $20 million.
The alleged scheme took place between 2006 and 2008 and involved confidential information about targeted acquisitions of such companies as Getty Images, Inc., Kronos Inc. and aQuantive Inc. The complaint against the couple charges violations of federal securities laws antifraud provisions and seeks permanent injunctive relief as well as disgorgement of illicit profits.
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