SEC Charges Two Men with Insider Trading on Confidential Information from Their Wives (with Lofchie Comment)

The SEC announced two separate cases against men who profited by insider trading on confidential information they had learned from their wives about Silicon Valley-based tech companies.

The SEC alleged that Tyrone Hawk violated a duty of trust by trading after he overheard work calls made by his wife, a finance manager at Oracle Corp., regarding 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 Oracle Corp. was in the process of acquiring another company. According to the SEC complaint, Hawk bought Acme Packet shares before the acquisition was announced in February 2013, and reaped approximately $150,000, by selling after the stock price rose 23 percent, after acting on the news.

Separately, the SEC alleged that in mid-2012, Ching Hwa Chen profited from gleaning the confidential information that his wife's employer, Informatica Corp., would miss its quarterly earnings target for the first time in 31 consecutive quarters. Additionally, during a vacation drive, Chen overheard business calls by his wife, who had previously advised Chen not to trade in Informatica securities under any circumstances. However, Chen then established securities positions designed to make money if the stock price fell. Informatica's shares declined more than 27 percent, and Chen realized nearly $140,000 in profits.

Without admitting or denying the allegations, both men agreed to pay fines to settle the SEC's charges.

See: SEC Complaint against Hawk; SEC Complaint against Chen; SEC Press Release.See also:SEC Insider Trading Cases.