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November 30, 2010

Deloitte US partner and wife charged for insider trading by SEC

A Deloitte US tax partner and his wife have been charged by the Securities and Exchange Commission (SEC) for repeatedly leaking confidential merger and acquisition information to family members overseas in a multi million dollar insider trading scheme.

Arnold McClellan and his wife Annabel allegedly provided advance notice of at least seven confidential acquisitions planned by Deloitte’s clients to Annabel’s sister and brother-in-law in London.

After receiving the illegal tips, the brother-in-law took financial positions in US companies that were targets of acquisitions by Arnold McClellan’s clients.

Their insider trading reaped illegal profits of approximately $3 million in US dollars, half of which was to be funnelled back to Annabel McClellan, alleges the SEC.

The UK Financial Services Authority (FSA) has announced charges against the two relatives James and Miranda Sanders, along with colleagues with whom he worked.

“Deloitte and its clients entrusted Arnold McClellan with highly confidential information. Along with his wife, he abused that trust and used high-placed access to corporate secrets for the couple’s own benefit and their family’s enrichment,” said Director of the SEC’s San Francisco Regional Office, Marc J. Fagel.

The confidential impending transactions allegedly revealed by McClellan include: Kronos, a Massachusetts-based data collection and payroll software company acquired by a private equity firm in 2007, aQuantive, a Seattle-based digital advertising and marketing company acquired by Microsoft in 2007 and Getty Images, a Seattle-based licenser of photographs and other visual content acquired by a private equity firm in 2008.

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