New York, NY – Earlier this week, the Securities and Exchange Commission charged former Dewey & LeBoeuf associate, Todd Leslie Treadway, with insider trading. This new case marks the fourth time in the past few years that an associate with a major law firm has been charged with insider trading.
In the complaint, filed in the United States District Court, Southern District of New York, the SEC alleges that Todd Leslie Treadway, who worked as an associate in Dewey & LeBoeuf’s New York office, generated $27,000 in profits on trades in Accredited Home Lenders Holding Co. and CNET Networks Inc. based on information he obtained while working at Dewey. These trades were allegedly made in 2007 and 2008.
Treadway provided Dewey clients with advice on the employee benefit and executive compensation consequences of mergers and acquisitions. As a result, the SEC alleged that he had access to nonpublic information about potential merger deals under consideration. Treadway is accused of trading on this information in two instances.
Dewey fired Mr. Treadway in November 2008, after the alleged insider trading was brought to their attention as a result of an investigation by FINRA into unusual trading ahead of the CBS / CNET merger.
As mentioned earlier, the Treadway case marks the 4th associate of a major law firm that has been charged with insider trading in the past few years. In 2009, two former Ropes & Gray lawyers plead guilty to insider trading after having been caught up in the Galleon probe. Last year a former Nixon Peabody associate pleaded guilty to improper trading.
This new insider trading case against Treadway is unaffiliated with either the Galleon probe, or the more recent investigation surrounding consultants, hedge fund clients, and employees of Mountain View California-based expert network firm Primary Global Research. What is clear from this latest charge is that the SEC is not targeting hedge funds, or expert network providers. Rather, the commission is continuing its vigorous attack on traditional insider trading cases – wherever they occur.