POSTED FEB 05, 2015 09:58 AM CST
A legal assistant who complained to her long-time boyfriend about extra work required for an impending merger thought her remarks would be kept confidential, according to the Securities and Exchange Commission.
But the boyfriend told his father, who bought stock based on the information and advised four others to do the same, according to the SEC. On Tuesday, the agency filed a civil complaint against the father, 80-year-old Joel Epstein of Huntingdon Valley, Pennsylvania, who agreed to pay $495,627 to settle the matter, report the Legal Intelligencer and the Philadelphia Business Journal. The SEC has a press release here and the complaint here (PDF).
Epstein made about $113,503 from trading in shares of the Harlesville Group insurance company, which was merging with Nationwide Mutual Insurance Co., the SEC says. The four people he tipped made $123,511.
The complaint does not identify the girlfriend or her boyfriend, but says she was a legal administrative assistant to the lead transaction partner at the law firm advising Harleysville in 2011. The law firm is not identified, but the Legal Intelligencer notes announcements that Fox Rothschild represented Harleysville in the deal.
“Client confidentiality is at the core of what we do at Fox Rothschild, and we’ve long maintained strict policies and internal controls to protect it,” Fox Rothschild chairman Abraham Reich told the Legal Intelligencer. “We have and continue to provide our full support of any investigation of this matter.”
The boyfriend worked at a Philadelphia tire store owned by his father and the two men were close, according to the SEC complaint, which claims the father violated a duty of trust and confidence between father and child.
The assistant and her boyfriend had dated about eight years, and she relied on the boyfriend to help with child care for her son. Neither the assistant nor her boyfriend have been charged.