SEC Charges Montana-Based Paralegal and Father with Insider Trading

May 08, 2012 /

The Securities and Exchange Commission has sued a former paralegal at a Kalispell, Mont.-based semiconductor company and her father after they have traded on confidential information about the 2009 acquisition of the company.

The SEC alleges that Angela Milliard wired money to her boyfriend’s brokerage account so she could illegally trade on nonpublic materials she learned while working as a legal assistant on Semitool Inc.’s then-secret deal with a Silicon Valley company.

Recently, Matthew H. Kluger, a corporate lawyer, and Garrett D. Bauer, a Wall Street trader, settled a $32 million insider trading case filed by the SEC last year over at least 11 merger and acquisition announcements involving clients of the law firm where the attorney worked.

On the other hand, Angela Milliard also allegedly tipped her father Kenneth Milliard with the confidential information, before traded on the nonpublic information and tipped his sons, who also made trades. They reaped their illegal insider trading profits following the public announcement of the merger on Nov. 17, 2009. The morning the acquisition was announced, the Milliards sold their shares for illicit profits of more than $67,000.

Angela and Kenneth Milliard have settled the SEC’s charges without admitting or denying the allegations by paying more than $175,000. Angela Milliard agreed to pay full disgorgement of her trading profits totaling $20,355 plus prejudgment interest of $1,614.60 and a penalty of $54,022.11. Kenneth Milliard agreed to pay full disgorgement of his and his sons’ trading profits totaling $47,805 plus prejudgment interest of $3,765.19 and a penalty of $47,805.11.

“Angela Milliard exploited her access to confidential merger and acquisition information to illicitly enrich herself and her family,” said Marc Fagel, Director of the SEC’s San Francisco Regional Office. “As a member of a legal department entrusted with sensitive deal documents, she had a duty to safeguard that information, not trade on it.”

According to the SEC’s complaint filed in federal court in Montana, Angela Milliard first gathered the confidential deal information in October 2009, when she learned that Semitool and the acquiring company – Applied Materials Inc. – had entered into advanced merger negotiations. After learning that the tender offer was to happen in mid-November at a nearly 30 percent premium over Semitool’s then-trading price, she wired money to her boyfriend’s brokerage account and used it to surreptitiously buy shares of Semitool.

The SEC’s investigation was conducted by Jennifer J. Lee and Jina L. Choi of the San Francisco Regional Office.

 

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