Ex Deloitte Tax Partner, Wife Charged with Insider Trading Scheme
The Securities and Exchange Commission (SEC) has filed a lawsuit November 30 against a former partner at Deloitte Tax LLP and his wife for allegedly engaging in an international insider trading scheme.
The SEC claimed the two had leaked confidential information about merger and acquisition several times to members of family abroad, the worth of which amounted to $3 million.
Arnold McClellan and wife Annabel, both living in San Francisco, allegedly let out the information about a planned acquisition of Deloitte’s clients and gave it to Annabel’s sister and brother-in-law in London. The brother-in-law, then, assumed financial positions in different US companies subject to the merger and acquisition when he received the bribe.
The succeeding insider trading schemes have been timed with telephone calls between Annabel McClellan and her sister, and a series of in-person visits with the rest of the family members. Half of the trading scheme’s yield went to Annabel McClellan.
The UK Financial Services Authority (FSA) sued family members James and Miranda Sanders, together with James’s accomplice when he was working at a derivatives firm based in London. The same trading scheme earned for Sanders’s tippees nearly $20 million in U.S. dollars.
Robert Khuzami, Director of the SEC’s Division of Enforcement, said the Sanders were wrong when they thought they could hide their insider trading scheme by mobilizing their relatives overseas.
Arnold McClellan had been entrusted with Deloitte’s top confidential information when he served as Deloitte’s regional mergers and acquisitions team head, providing advice related to tax to clients of Deloitte who were mulling over engaging in merger and acquisitions.
The lawsuit against Arnold and Annabel McClellan indicts the couple with violations against federal securities laws’ antifraud provisions, seeking to permanently relieve them of service through an injunction, disgorge their illicit profits with prejudgment interest, and deal out fines to the couple.