Business Crimes Hotline

The Securities and Exchange Commission (SEC) charged Ching Hwa Chen, 61, and Tyrone Hawk, 46, with insider trading in separate and unrelated civil cases, according to complaints filed in the U.S. District Court for the Northern District of California. According to the SEC, both men traded on information they overheard listening to their wives' business calls, reaping nearly $300,000 in total illicit gains. Neither man admitted to or denied the allegations lodged against them by the SEC.

“Spouses and other family members may gain access to highly confidential information about public companies as part of their relationship of trust,” Jina Choi, director of the SEC's San Francisco regional office, said in a prepared statement. “In those circumstances, family members have a duty to protect and safeguard that information, not to trade on it.”

According to the SEC, Chen in June 2012 was traveling to Reno, NV, with his wife, the senior tax director at Informatica Corp., when he overheard her talking on the phone with coworkers about the Redwood City company's expected failure to meet second-quarter revenue projections. In the following days, Chen bought put options and sold short Informatica's common stock. When the software development company's stock price plummeted 27% on July 6 on news of lower revenues, he walked away with $138,000.

Hawk, too, overheard phone conversations involving his wife, an Oracle Corp. finance manager who was working on the company's acquisition of Acme Packet Inc.

Hawk used the information to buy more than $600,000 worth of Acme stock over a two-week period. After Oracle's acquisition was announced in February 2013, Acme's stock price increased by 23%. Hawk cashed out, earning $151,480 from the sales.

In the last few years, the SEC has gone after several spouses accused of trading on information misappropriated from their wives. In 2011, William Marovitz agreed to pay $168,352 to settle charges that he used confidential information gleaned from his wife, former Playboy CEO Christie Hefner, to gain a trading advantage in the stock market over a five-year period. Last year, the SEC settled with the husband of a Baker & Hostetler partner accused of using confidential information for profit. ' Cheryl Miller , The Recorder

CALIFORNIA

SEC Charges Husbands With Insider Trading

Two California men recently settled federal charges that they used information gleaned from their wives about tech companies to profit illicitly in the stock market.

The Securities and Exchange Commission (SEC) charged Ching Hwa Chen, 61, and Tyrone Hawk, 46, with insider trading in separate and unrelated civil cases, according to complaints filed in the U.S. District Court for the Northern District of California. According to the SEC, both men traded on information they overheard listening to their wives' business calls, reaping nearly $300,000 in total illicit gains. Neither man admitted to or denied the allegations lodged against them by the SEC.

“Spouses and other family members may gain access to highly confidential information about public companies as part of their relationship of trust,” Jina Choi, director of the SEC's San Francisco regional office, said in a prepared statement. “In those circumstances, family members have a duty to protect and safeguard that information, not to trade on it.”

According to the SEC, Chen in June 2012 was traveling to Reno, NV, with his wife, the senior tax director at Informatica Corp., when he overheard her talking on the phone with coworkers about the Redwood City company's expected failure to meet second-quarter revenue projections. In the following days, Chen bought put options and sold short Informatica's common stock. When the software development company's stock price plummeted 27% on July 6 on news of lower revenues, he walked away with $138,000.

Hawk, too, overheard phone conversations involving his wife, an Oracle Corp. finance manager who was working on the company's acquisition of Acme Packet Inc.

Hawk used the information to buy more than $600,000 worth of Acme stock over a two-week period. After Oracle's acquisition was announced in February 2013, Acme's stock price increased by 23%. Hawk cashed out, earning $151,480 from the sales.

In the last few years, the SEC has gone after several spouses accused of trading on information misappropriated from their wives. In 2011, William Marovitz agreed to pay $168,352 to settle charges that he used confidential information gleaned from his wife, former Playboy CEO Christie Hefner, to gain a trading advantage in the stock market over a five-year period. Last year, the SEC settled with the husband of a Baker & Hostetler partner accused of using confidential information for profit. ' Cheryl Miller , The Recorder