Two California husbands who allegedly heard their executive wives discussing nonpublic information on the phone were sued for insider-trading by the U.S. Securities and Exchange Commission.
Ching Hwa Chen, 61, of San Jose, California, overheard his wife, Informatica Corp.’s senior tax director, discussing the company’s quarterly results in June 2012 and gleaned that it might miss its forecasts, the SEC said in a complaint filed in federal court. Chen bought options and sold the company’s shares short, making $138,000 when they dropped, the SEC said.
His wife had told him not to trade in Informatic shares under any circumstances and Chen hid the trades from her, the SEC said.
Chen, who didn’t admit or deny wrongdoing, agreed to pay $280,523 to settle the case, according to the SEC.
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In a separate complaint, the agency said Tyrone Hawk, 46, of Los Gatos, California, made $151,480 by selling shares of Acme Packet Inc. that he bought after overhearing his wife, an Oracle Corp. finance manager, in discussions regarding the software company’s acquisition of Acme in February 2013.
Hawk, who also didn’t admit to or deny the allegations, agreed to pay about $305,614 to resolve the SEC lawsuit, according to court documents.
Both cases were filed today in federal court in San Jose, California. The mens’ wives weren’t accused in the lawsuit of any improper actions.
David Cohen, an attorney for Chen, declined to comment on the lawsuit. Ed Swanson, an attorney for Hawk, didn’t immediately return a voice-mail message seeking comment.
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