Tuesday, April 1, 2014

The Tale of the Eavesdropping Husbands, or Peek-A-Boo, SEC You

A man is being charged with violating a duty of trust by trading during a blackout window after he overheard work calls made by his wife.

“Spouses and other family members may gain access to highly confidential information about public companies as part of their relationship of trust,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office. “In those circumstances, family members have a duty to protect and safeguard that information, not to trade on it.

Tyrone Hawk of Los Gatos, Calif., overheard his wife, a finance manager at multinational computer technology corporation Oracle Corp speaking of her company’s plan to acquire Acme Packet Inc. Hawk also had a conversation with his wife in which she informed him that there was a blackout window for trading Oracle securities because it was in the process of acquiring another company, the SEC said.

In an unrelated case, the SEC alleges that Ching Hwa Chen of San Jose, Calif., profited from gleaning confidential information in mid-2012 that his wife’s employer, Informatica Corp., would miss its quarterly earnings target for the first time in 31 consecutive quarters. During a drive to vacation in Reno, Nev., Chen overheard business calls by his wife, who previously advised Chen not to trade in Informatica securities under any circumstances. (more)

Hawk agreed to pay more than $300,000 to settle the SEC’s charges.

Chen agreed to pay approximately $280,000 to settle the SEC’s charges.