Partner who overheard lawyer discuss client merger is indicted for alleged insider trading
A real estate partner in the Philadelphia headquarters of a national law firm overheard a colleague talking with their shared legal assistant about an imminent client merger. Then he illegally used the insider information in purchasing stock in the client’s company for himself and his wife, federal regulators say.
Herbert Sudfeld, 64, was indicted (PDF) on Thursday over the claimed misuse of that confidential information in 2011. It concerned a merger between Harleysville Group and Nationwide Mutual Insurance Company, and Sudfeld allegedly used the information to purchase Harleysville stock, CBS Philly reports.
“He purchased stock the day before the merger was publicly announced,” said assistant U.S Attorney Denise Wolf. “And then, hours after it was publicly announced, he sold that same stock. He made over $75,000 over that short period of time through these transactions.”
The U.S. Securities and Exchange Commission did not identify Sudfeld’s law firm in a press release about the indictment of Sudfeld and a related civil complaint filed by regulators in federal court in Philadelphia against Sudfeld and his wife. A SEC civil complaint (PDF) says only that “Sudfeld was previously a partner of Law Firm, a national law firm headquartered in Philadelphia.”
Law 360 (sub. req.) says Sudfeld was with Fox Rothschild until 2012, when he joined Curtin & Heefner in Bucks County. He is currently listed as a partner on that firm’s roster, the Philadelphia Inquirer reports.
Attorney Robert Welsh represents Sudfeld. He told the newspaper his client plants to enter a not guilty plea Monday, but otherwise declined to discuss the case.
