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Summary: Attorney Chet Little and an acquaintance were charged in New York with using the information he gained from his job to place trades ahead of public announcements to make a profit.
A Florida lawyer and his neighbor were arrested, accused of engaging in a $1 million insider trading scheme. Prosecutors claim that Walter “Chet” Little, a partner at Foley & Lardner at the time, used information from the law firm’s database. Little left Foley in 2016 to join Bradley Arant Boult Cummings in Tampa where he focuses on advising residential and commercial developers.
Andrew Berke was also charged with conspiracy and securities fraud in the criminal complaint filed in Manhattan federal court. According to Acting U.S. Attorney Joon Kim, both men were arrested in Florida where they live.
The complaint states that starting in 2015, Little used Foley’s document managing system to obtain information from at least seven of the firm’s clients, including Oshkosh Corp and Harley Davidson Inc. He never billed the clients for any work done for them. When he learned of upcoming changes to the companies like mergers, earnings, and other events, he bought and sold stock and options before the public announcements. These actions made him over $320,000 in profits.
Little shared this information with his neighbor Berke who was an executive at a logistics company. Since 2013, they have both lived within the Apollo Beach community in Florida. Berke earned even more by making trades of the information he gained from Little, around $660,000.
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Foley & Lardner spokesman Daniel Farrell said the firm, comprised of roughly 840 lawyers, learned of Little’s actions in June of 2016 when they reported it to the authorities. Farrell said, “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.”
A civil lawsuit by the U.S. Securities and Exchange Commission was also filed against both men.
Todd Foster is representing Little while Berke has retained Caroline Mehta.
What kind of security measures could law firms set in place to protect their information internally? Tell us your thoughts in the comments below.
To learn more about lawyers caught for insider trading, read these articles:
- Former Managing Clerk of Simpson Thacher & Bartlett Charged in Insider Trading Case
- Former Arent Fox Patent and IP Partner Found Guilty of Insider Trading
- Former Simpson Thacher Employee Guilty of Insider Trading
- Guilty Plea in Law Firm Inside Trading Case from Napkin-Eating Middleman
Photo: businessobserverfl.com
