More insider trading cases from the commission. This time the SEC charges that the defendant used information that he gleaned or stole from his girlfriend who was working for Disney on it acquisition of Marvel Entertainment in 2009.
A slightly different twist on the classic insider trading case. According to the SEC he used his brother's account to make the trades. Did he think that was going to fool investigators? But just before many of his purchases he searched the Internet for terms such as “insider trading,” “material, non-public information,” and “Rule 10b-5.”So much for a defense of lack of intent or knowledge of the acquisition.
According to the SEC’s complaint the defendant's girlfriend worked on the Marvel acquisition as an extern in Disney’s corporate strategy department, and she possessed confidential details about the pricing and timing of the deal, and the SEC is alleging that the defendant illegally traded on this non-public information in breach of his duty of trust and confidence to his girlfriend.
The misappropriation theory has certainly taken us a long way from the wording of the statute - that the fraud must be in connection with the purchase or sale of a security.
The SEC Complaint is at the Commission's site.