Insider Trading Meets Alcoholics Anonymous: A New Low

From Dealbook:

“Federal regulators charged a money manager with trading on confidential information about the acquisition of a Philadelphia-based insurance company passed to him by an executive at the insurer. The two men were A.A. members, and the insurance executive had confided in the money manager that the stress of the deal was driving him to drink, according to the complaint.”

Not sure I even need to add anything on this one…

Just in case the above snippet wasn’t enough for you:

“In its lawsuit, the S.E.C. noted the “Twelfth Tradition” of A.A., which is the organization’s policy of anonymity that encourages participants to speak to freely speak to each other before, during and after each meeting.

“The confidentiality of information shared between members of the A.A. program is underscored at each meeting, where participants are reminded that ‘what is discussed here stays here,’” said the S.E.C. complaint. “Confidentiality is integral to the operation of A.A.”

In 2008, the insurance executive confided in Mr. McGee about the sale of his company to Tokio Marine, the S.E.C. said. He said that he was under significant pressure to ensure a successful sale of his company to Tokio Marine, and that the strain was leading him to start drinking again.

The S.E.C. said that the confidential tip led Mr. McGee to buy shares in Philadelphia Consolidated and then leak news of the pending deal to Mr. Zirinsky, his Ameriprise colleague. Mr. Zirinsky then tipped off others and purchased stock in the brokerage accounts of numerous relatives, including his 89-year-old grandmother’s account, who allegedly earned about $200,000 in illegal profits The grandmother was not charged in the case, but the S.E.C. is seeking to disgorge her gains.”

-KD

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