SEC: Tipsy lawyer tried to be a 'big shot,' leading to friend's insider trades
A lawyer who drank too much wine tried to imply he was a “big shot” by blurting out an indirect reference to one of his corporate clients during a pending acquisition, leading his dinner companion to make insider trades, according to a suit by the Securities and Exchange Commission.
The lawyer is identified in the complaint (PDF) as Robert M. Schulman, but he is not named as a defendant, according to the Am Law Daily and Above the Law, both of which cite a story by Law360 (sub.req.). The stories note that a lawyer named Robert M. Schulman is a partner at Hunton & Williams. The law firm refused to comment to the publications.
The suit accuses investment adviser Tibor Klein of trading in the stock of King Pharmaceuticals for himself and more than 40 of his clients as a result of Schulman’s comment.
The complaint says Klein managed Schulman’s investments, and he visited the home of Schulman and his wife three or four times a year to review their portfolio and socialize.
During one of the meetings on an August weekend in 2010, the SEC alleges, “Schulman drank several glasses of wine and became intoxicated. He blurted out to Klein, ‘It would be nice to be King for a day.’ Schulman intended to imply he was a ‘big shot’ who knew ‘some kind of information’ about King Pharmaceuticals.”
Schulman had been informed of the deal because he represented King Pharmaceuticals in litigation, the SEC says. According to the stories, Schulman represented the company in a patent case that was dismissed after a settlement.