Two men accused of trading on inside information from their wives

The husband of an Oracle Corp. employee is accused of trading on inside information he learned from his wife's work telephone calls.
(Paul Sakuma / Associated Press)

This is one marital benefit that could get you in trouble.

The Securities and Exchange Commission said two men made illegal stock trades after overhearing their wives discuss inside information about their companies on the telephone.

The cases were unrelated, but the circumstances were similar.

The SEC said in a lawsuit that Tyrone Hawk of Los Gatos overheard his wife, a finance manager at Oracle Corp., discussing the company’s planned acquisition of Acme Packet Inc. Using that information, Hawk purchased shares of Acme before the acquisition was announced in February 2013. Acme shares skyrocketed after the announcement, enabling Hawk to make about $150,000 of illegal profit, the SEC alleged.


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Hawk has agreed to pay $300,000 to settle the allegations, the SEC said. He did not admit or deny the allegations.

In a separate case, the SEC said that Ching Hwa Chen of San Jose profited after overhearing inside information about his wife’s employer, Informatica Corp. On a drive to vacation in Reno in 2012, Chen overheard his wife discussing on the telephone that Informatica would miss its quarterly earnings target for the first time in 31 consecutive quarters.

Chen then shorted Informatica’s stock, an investment that would profit if the company’s shares fell. After the company publicly disclosed the lower-than-expected earnings, its stock price plummeted and Chen realized nearly $140,000 in profit, the SEC said.


Chen agreed to pay about $280,000 to resolve the SEC’s allegations, without admitting or denying guilt.

“Spouses and other family members may gain access to highly confidential information about public companies as part of their relationship of trust,” said Jina L. Choi, director of the SEC’s San Francisco regional office. “In those circumstances, family members have a duty to protect and safeguard that information, not to trade on it.”


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