Saturday, April 26, 2008

One of the more interesting insider trading cases in a while

It may not compare to this one (indeed it is hard to imagine one that would), it is definitely an easier story to tell in class and pretty good!

Brother, Can You Spare a Tip? - Law -
"According to the complaint....Stummer allegedly sneaked into the brother-in-law's bedroom office and, without permission, accessed his brother-in-law's computer. By correctly guessing the password, Stummer deceptively gained unauthorized access to the private equity firm's computer network and read several confidential and nonpublic emails relating to the Ryan transaction, according to the SEC.

The SEC's complaint also alleged that Stummer used the information to buy 5,500 shares....Shortly following the public announcement of the acquisition of Ryan's on July 25, Stummer sold his entire position at a total profit of $22,351.17.

Without admitting to or denying the commission's allegations, Stummer agreed to a judgment requires him to pay $46,386.66, representing the disgorgement of his illegal trading profits, prejudgment interest, and a civil penalty in an amount equal to the profits"

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