Ex-Foley Partner Charged with Insider Trading
What is it with lawyers who can't keep client information confidential?
Are some secrets so compelling they just have to be disclosed, a la Eric Snowden revealing how the federal government was snooping on Americans' email? Or is it because some confidentiality agreements violate public policy, like settlements in products liability cases that conceal dangers to consumers?
In the case of another BigLaw attorney, not so much. Walter "Chet" Little, a former partner at Foley & Lardner, allegedly used confidential information to make money. He apparently made more than $320,000 in the process.
Little has been arrested for trading on inside information he obtained at his former law firm. Federal prosecutors say he also gave the information to his neighbor, and together they made about $1 million in the securities fraud. The U.S. Securities and Exchange Commission also filed a civil complaint against Little and his neighbor, Andrew Berke.
"We are evaluating the allegations and our response," said Todd Foster, a lawyer for Little, Reuters reported. "Mr. Little maintains his innocence."
According to the complaint, Little accessed files of seven law firm clients and learned about upcoming mergers, earnings, and events. Little then bought and sold stock and options with the information and profited about $320,000.
He also gave insider information to Berke, who lived in the same community. Berke traded on the tips and made about $660,000, the complaint said.
Foley discovered the breach last year and reported it to authorities. Little left the firm and joined Bradley Arant, which severed his employment after the arrest.
According to the American Lawyer, Foley is one of several large law firms that have been stung by insider trading. In March Arent Fox partner Robert Schulman was convicted of insider trading, and Steven Metro with Simpson Thacher & Bartlett pleaded guilty in 2015 in an insider trading scheme.
In Little's case, Foley said it took action when its internal policies had been compromised.
"We take this matter very seriously, and we have zero tolerance for actions that violate our core values and the trust our clients place in us," Farrell said in a statement. "We will continue to hold all of our people to the highest standards of professional and ethical conduct."
- SEC Charges Law Firm Partner and his Neighbor in $1 Million Insider Trading Scheme (U.S. Securities and Exchange Commission)
- Law Student Caught Using Invisible Ink to Cheat (FindLaw's Greedy Associates)
- Meet the Lawyer Taking Down International Terrorists (FindLaw's Greedy Associates)
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