Yesterday, the SEC announced the filing of an insider trading case against three Canadian citizens, including the husband of an administrative assistant with Merrill Lynch Canada. The SEC says that when they were discussing what was happening at her job, the wife sometimes mentioned nonpublic information such as the identities of a number of companies involved in confidential, upcoming business combinations, expecting the husband would keep it confidential. Instead, the SEC alleges, he tipped off certain friends who traded on the information and made a total of nearly one million dollars in ill-gotten gains.
After careful consideration, we have determined that this case falls under Betrayal Level: Guarded (”Counseling Required”) on the Familial Betrayal Advisory System we established in December 2008. Full details are available in this post on my Enforcement Action blog over at Compliance Week.