Insider Trading: Keeping it Inside the Family
Well, the holiday season is traditionally a time for family, after all. Perhaps that explains what is starting to look like a trend in recent SEC Enforcement.
Since the return from the Thanksgiving weekend, there have been at least three enforcement releases in which groups of family members have been charged with insider trading:
- On November 30, the SEC filed a Complaint against Arnold McClellan and his wife Annabel, alleging that both “repeatedly tipped inside information about upcoming mergers to family members in London.” The SEC focused especially on Annabel’s improper disclosures to her sister and brother-in-law.
- On December 7, the SEC charged brothers-in-law Jeffrey Temple and Benedict Pastro with insider trading. As the Complaint notes, “Pastro is related to Temple by marriage; they are brothers-in-law in that their wives are sisters.”
- And on December 8, a press release entitled “SEC Charges Uncle and Nephew in Insider Trading Scheme” announced the ongoing investigation into alleged activities by family members Brett Cohen and David Myers. The leaked information, according to the SEC Complaint, originated with a brother, who passed it to his brother, who passed it to his fraternity brother (Cohen, Myers’ nephew), who passed it to his uncle (Myers), who exploited it for profit.