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Pennsylvania lawyer indicted for insider trading ahead of merger

By Nate Raymond

(Reuters) - A Pennsylvania lawyer was indicted on Thursday on charges that he engaged in insider trading after learning that a client at his law firm was about to announce a merger.

Herbert Sudfeld, 64, was charged with five counts including securities fraud and making a false statement in an indictment filed in federal court in Philadelphia.

Prosecutors said Sudfeld engaged in the insider trading while he was a partner at a law firm that represented insurer Harleysville Group Inc in its $760 million merger with Nationwide Mutual Insurance Co [NMUIC.UL] in 2011.

Robert Welsh, Sudfeld’s lawyer, said his client would plead not guilty at his arraignment on Monday.

Neither the indictment nor a related lawsuit by the U.S. Securities and Exchange Commission filed on Thursday named the law firm. But Fox Rothschild, which advised Harleysville, confirmed it was the law firm in question.

Mark Silow, Fox Rothschild’s managing partner, said the firm was “saddened” to hear about the charges against Sudfeld, who ceased working at the firm in 2012. Silow added that the firm had always taken steps to safeguard clients’ confidences.

According to the indictment, Sudfeld, a real estate lawyer, learned his partners were representing Harleysville two days before the merger was announced and bought stock in the company ahead of the news.

When the merger with Nationwide was announced, Harleysville’s stock rose about 85 percent. Sudfeld then sold the shares he had bought just a day earlier, reaping $75,530 in profits, prosecutors said.

The indictment said that Sudfeld later made false statements to Federal Bureau of Investigation agents investigating insider trading.

(Reporting by Nate Raymond in New York; Editing by Alan Crosby)

Pennsylvania lawyer indicted for insider trading ahead of merger

By Nate Raymond

July 16 (Reuters) - A Pennsylvania lawyer was indicted on Thursday on charges that he engaged in insider trading after learning that a client at his law firm was about to announce a merger.

Herbert Sudfeld, 64, was charged with five counts including securities fraud and making a false statement in an indictment filed in federal court in Philadelphia.

Prosecutors said Sudfeld engaged in the insider trading while he was a partner at a law firm that represented insurer Harleysville Group Inc in its $760 million merger with Nationwide Mutual Insurance Co in 2011.

Robert Welsh, Sudfeld’s lawyer, said his client would plead not guilty at his arraignment on Monday.

Neither the indictment nor a related lawsuit by the U.S. Securities and Exchange Commission filed on Thursday named the law firm. But Fox Rothschild, which advised Harleysville, confirmed it was the law firm in question.

Mark Silow, Fox Rothschild’s managing partner, said the firm was “saddened” to hear about the charges against Sudfeld, who ceased working at the firm in 2012. Silow added that the firm had always taken steps to safeguard clients’ confidences.

According to the indictment, Sudfeld, a real estate lawyer, learned his partners were representing Harleysville two days before the merger was announced and bought stock in the company ahead of the news.

When the merger with Nationwide was announced, Harleysville’s stock rose about 85 percent. Sudfeld then sold the shares he had bought just a day earlier, reaping $75,530 in profits, prosecutors said.

The indictment said that Sudfeld later made false statements to Federal Bureau of Investigation agents investigating insider trading.

(Reporting by Nate Raymond in New York; Editing by Alan Crosby)

SEC Charges Pennsylvania Attorney with Insider Trading in Advance of Merger Announcement

Washington D.C.–(Newsfile Corp. - July 16, 2015) - The Securities and Exchange Commission today charged a Pennsylvania attorney with insider trading in the stock of Harleysville Group, Inc. in advance of the 2011 announcement of a $760 million merger of Harleysville and Nationwide Mutual Insurance Company.

According to the SEC’s complaint, Herbert K. Sudfeld illegally traded on the news that sent Harleysville’s stock price up 87 percent when the merger of the two insurance companies was announced in September 2011.  At the time, Sudfeld was a real estate partner at a law firm that advised Harleysville on the merger.  Sudfeld was not involved in the merger and learned that the announcement of it was imminent from a conversation between an attorney working on the transaction and their shared legal assistant.  Sudfeld allegedly stole the inside information and purchased Harleysville stock in his and his wife’s accounts.  Once the merger was announced, Sudfeld sold all the shares he had purchased, realizing approximately $79,000 of illegal profits.

In a parallel action, the U.S. Attorney’s Office for the Eastern District of Pennsylvania today announced criminal charges against Sudfeld.

“We allege that Sudfeld breached his duties of trust and confidence owed to his law firm when he misappropriated information about the merger to enrich himself,” said Daniel M. Hawke, Chief of the Division of Enforcement’s Market Abuse Unit.  “The Commission will continue to aggressively pursue attorneys and other professionals who abuse their access to confidential information.”

The SEC’s complaint filed in federal court in Philadelphia names Sudfeld’s wife, Mary Jo Sudfeld, as a relief defendant for the purpose of recovering insider trading profits in her brokerage account through trades conducted by Sudfeld.  The complaint charges Sudfeld with violating antifraud provisions of the federal securities laws and an SEC antifraud rule.  The SEC seeks a permanent injunction and financial penalties against Sudfeld and return of allegedly ill-gotten gains and prejudgment interest from Sudfeld and Mary Jo Sudfeld.

The SEC’s investigation has been conducted by Kelly L. Gibson, Assunta Vivolo and John Rymas of the SEC’s Market Abuse Unit in the Philadelphia Regional Office.  The case is being supervised by Mr. Hawke and G. Jeffrey Boujoukos.  The litigation will be led by David A. Axelrod and John V. Donnelly of the Philadelphia Office.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Federal Bureau of Investigation.



from Newsfile Corp News Releases http://ift.tt/1GoRsnE
SUDFELD SECURES PLACE ON WUERFFEL TROPHY WATCH LIST

SUDFELD SECURES PLACE ON WUERFFEL TROPHY WATCH LIST

Indiana senior quarterback Nate Sudfeld secured a place on the watch list for the 2015 Wuerffel Trophy, it was announced Wednesday. Sudfeld is also on the 2015 Maxwell Award Watch List.

The Wuerffel Trophy, known as “College Football’s Premier Award for Community Service,” is presented annually by the All Sports Association in Fort Walton Beach Florida. Named after 1996 Heisman Trophy winning…

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