US: SEC charges attorney with insider trading tied to merger

The Securities and Exchange Commission has charged Pennsylvania attorney Herbert K. Sudfeld with insider trading ahead of the 2011 deal announcement between Harleysville Group and Nationwide Mutual Insurance.

Sudfeld at that time was real estate partner at a law firm that advised Harleysville on the $760 million merger, according to the SEC’s compliant. After overhearing a conversation between an attorney working on the transaction and their shared legal assistant that the deal between the insurance companies was imminent, Sudfeld purchased Harleysville stock in his and his wife’s accounts, the SEC alleged. Harleysville’s stock price soared 87% when the merger of the two insurance companies was announced in September 2011, after which Sudfeld sold all the shares he had bought, realizing roughly $79,000 of illegal profits.

“We allege that Sudfeld breached his duties of trust and confidence owed to his law firm when he misappropriated information about the merger to enrich himself,” Daniel M. Hawke, chief of the SEC’s division of enforcement’s market abuse unit, said in a press release. “The commission will continue to aggressively pursue attorneys and other professionals who abuse their access to confidential information.”

Full content: US Securities and Exchange Commission

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