Two Californian citizens had to pay hundred thousand dollars as a compensation to settle the lawsuit of insider trading, Bloomberg reported. The two husbands who allegedly heard their executive wives discussing nonpublic information on the phone and used it for unlawful speculations were accused by securities regulators.
Ching Hwa Chen of San Jose overheard his wife, Informatica Corp.’s senior tax director, discussing the company’s quarterly results for June 2012 and gleaned that they might miss its forecasts. Chen bought options and sold the company’s shares short making $138,000 when they dropped after the company did not live up to the expectations.
Likewise, Tyrone Hawk made $151,480 by selling shares of Acme Packet Inc. He bought them after overhearing his wife, an Oracle Corp. finance manager, in discussions regarding the software company’s planned acquisition of Acme in February 2013.
Both insiders did not admit the wrongdoing, but agreed to pay the compensations in full to resolve the lawsuits. Chen and Hawk paid $280,000 and $305,000 respectively.
Interestingly, the lawsuits were filed by the U.S. Securities and Exchange Commission (SEC) solely against men involved in speculations. Their wives were not accused of any improper actions.
Recently, the Commission has spotted several similar cases. In the most notorious case, the wife of an ex-Deloitte Tax LP partner agreed to pay $1 million to settle SEC claims that she tipped family members to merger deals. Moreover, she was sentenced to 11 months in prison for her attempts to hinder the investigation.
