SAN FRANCISCO (CN) – A former Deloitte Tax partner and his wife leaked confidential merger and acquisitions information to relatives in London in a “multimillion-dollar international insider trading scheme,” the SEC claims in Federal Court.
The agency says San Francisco residents Arnold and Annabel McClellan “repeatedly tipped inside information about upcoming mergers to family members in London.”
Arnold, 51, told his wife about deals he was working for his Deloitte clients, and Annabel, 38, passed the information to her sister and brother-in-law, Miranda and James Sanders, the SEC claims.
“The McClellans knew that the nonpublic information they disclosed violated Arnold McClellan’s duty to keep the information confidential,” the lawsuit states.
James Sanders, head of the Blue Index brokerage, allegedly traded on the inside information, raking in more than $3 million on the tips. His colleagues and his firm’s clients made more than $20 million, according to the SEC.
The UK Financial Services Authority has charged the Sanders with inside trading, and Blue Index has been suspended from trading.
In one example of inside trading, Arnold McClellan told his wife that one of Deloitte’s clients, H&R, was planning on buying Getty Images, the SEC claims. That same day, Annabel flew to London to visit her sister, whose husband placed substantial spread bets on Getty the day Annabel arrived, the lawsuit states.
James Sanders made more than $600,000 on the Getty deal, and his best friend made more than $230,000, according to the complaint.
The SEC seeks an order barring the McClellans from engaging in securities fraud, and an order requiring them to forfeit the money they made from the alleged illegal trading.