Nixon Peabody Lawyer Used Client Stock Info to Net $5,800, SEC Says in Suit

Within 15 minutes of when Melissa Mahler was asked by a client company's CEO to draft a letter of intent concerning a potential merger in 2004, the then-Nixon Peabody technology and intellectual property associate allegedly called her stockbroker, according to the Blog of Legal Times.

She purchased 10,000 shares in the stock of the client company, Teleplus Consumer Services Inc., at 12 cents per share, the U.S. Securities and Exchange Commission says in an insider trading lawsuit (PDF) filed last week against Mahler in federal court in the District of Columbia.

Two days later, when the Teleplus merger with Rooms.com was announced on July 30, 2004, Mahler allegedly sold the stock for a profit of $5,800, the BLT recounts.

The article doesn't explain how Mahler, who then worked in the Rochester, N.Y., office of Nixon Peabody and is now a solo practitioner in New York, came under SEC scrutiny. The lawsuit seeks disgorgement of profits and a civil penalty.

She did not immediately respond to the law blog's requests for comment, but a Nixon Peabody spokeswoman said in a written statement that "Ms. Mahler was briefly employed by the firm and left nearly five years ago, immediately after we learned that her personal conduct had come under regulatory scrutiny. We have cooperated with the government's investigation and intend to continue doing so."