Thursday, December 4, 2014

Risk News: Law Firm Insider Trading Redux


Much has been written about insider trading touching Wilson Sonsini (with headlines in 2011 for a lawyer, and more recently this year, for an IT staff member). Now comes an update on this latest chapter: "Wilson Sonsini employee pleads guilty to insider trading in N.Y." --
  • "An information technology engineer at Wilson Sonsini Goodrich & Rosati pleaded guilty on Thursday to insider trading based on information he learned while working at the prominent Silicon Valley law firm."
  • "Dimitry Braverman, 41, pleaded guilty in New York federal court to one count of securities fraud, two years after another Wilson Sonsini employee, attorney Matthew Kluger, received the longest insider trading prison sentence in history in a separate case in New Jersey."
  • "Following Kluger's arrest, Wilson Sonsini's general counsel emailed employees to remind them of the firm's policies on insider trading, according to court documents."
  • "Braverman had access to information about pending transactions through his job working on software for the firm's finance operations, prosecutors said."
As reported previously, Braverman "had computer and database systems access to confidential information about, among other things, the law firm’s clients in potential merger and acquisition activity, as well as information about the identities of the other parties to the potential deal."

No firm wants to see its name associated with these sorts of allegations, which is why an investment in policies, processes and tools that help prevent and identify inappropriate access to client confidential information are a prudent risk investment.

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