The SEC, once again, foiled an overseas insider-trading ring, with assistance from U.K.'s FSA.  Here, in the U.S., a former Deloitte Tax LLP partner and his wife were charged with repeatedly leaking confidential M&A information to family members overseas.  Arnold and Annabel McClellan of San Francisco, allegedly gave advance notice of at least 7 confidential acquisitions planned by Deloitte clients.  Their recipients apparently were Annabel's sister and brother-in-law, in London.

    SEC Contacts.    Marc Fagel, Director, SF Regional Office @ 415-705-2449;  Michael Dicke, Assoc. Director, SF Regional Office @ 415-705-2458.

The brother-in-law allegedly traded on the information, taking financial positions in U.S. companies that were targets of acquisitions.  Subsequent trades were closely timed with telephone calls between Annabel McClellan and her sister, and with in-person visits with the McClellans.  All told, they generated $3 million in illegal profits.  The 2 families split the pot 50:50.

    U.K.'s FSA Takes Action.   The relatives in London - James and Miranda Sanders - were charged by the FSA.  James Sanders, in turn, tipped his colleagues and clients during the work day at his London-based derivatives firm - these tippees and clients generated $20 million in illegal profits;  they too were charged. 

James Sanders allegedly used the non-public information from the McClellans to purchase derivative financial instruments between 2006 and 2008.  He used "spread bets," which are pegged to the price of the underlying U.S. stock.  Starting off slow, Sanders would buy the equivalent of 1,000 shares in a target company.  He escalated to large positions, and began passing the information to colleagues and clients at his trading firm as well as to his father.

For further details, continue reading at:   [SEC PR 10-234, 11/30]