M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Tuesday, December 7, 2010

Bad tech support

You know that tech support guy at the office?  The one with the pocket-protector who seems totally out to lunch when it comes to anything other than networks and hardware?  Yeah, that guy.  Well, be careful what information you share with him, cause it's just an act.  He's lulling you into suspicion and then he's going to trade on your merger information!

The SEC just announced charges against Jeffrey Temple who worked as an IT and security manager at a Delaware law firm.  The SEC alleges that Temple stole confidential information about 22 pending mergers and traded ahead.  It was pretty small potatoes as these things go - Temple was alleged to have made about $84,000 in profits on the 22 trades.   The law firm is not identified in the complaint, but judging from their client list - it looks like Temple traded on almost every potential transaction that walked through the door- the firm is probably well known to all. 

 In any event, it appears that this guy opened a brokerage in his own name.  According to the complaint, Temple accessed information about pending deals presumably by looking at documents/traffic flowing through his firm's network.   Although he apparently knows how easy it would be to track activity over the firm's network that didn't stop him from allegedly snooping around and - when unable to reach his broker - use the firm's email to complain:

Still unable to trade options, at 9:08 am on March 8, 2010, Temple, using his Law Firm email account, sent another email to his brokerage firm complaining:  "Can't login to my account and no one is picking up the phone.  How do I get my trades done?  I'm losing money because of your incompetence!"

Your incompetence is making it impossible for me to  trade on inside information! Oh, he was trading call options.  I thought we had come to the conclusion that trading in options was clearly a bad thing to do if you are engaged in insider trading?  Why not just send an email to the SEC.  It would be much more efficient.  Clearly, Temple has not been to this site.  

In any event, it just goes to show you that at law firms it's not just the lawyers who have to be mindful of their obligations to maintain the confidentiality of client information.  Support personnel, including tech support, should also realize how the seriousness of their duties.  

-bjmq

Update:  The PhillyDeals blog (via ABA Journal) names the firm:  Richards Layton & Finger

http://lawprofessors.typepad.com/mergers/2010/12/bad-tech-support.html

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Comments

Wow. People in any business should follow they're contract's clause about confidentiality. Leaking confidential information is immoral, and is punishable by law. In the call center I work in, any information about the callers is kept confidential. If we try to leak anything, or try to dig some confidential information, that's a goodbye kiss to your job. Just sharing my opinion.

Posted by: call center | Jan 3, 2011 1:37:14 AM

I think that guy thinks he is really that good and the company won't know the illegal things he did. Being an IT and security manager comes a huge responsibility, the company already have trust on that person and he just throw it away. Trust is hard to gain, it will take time to grow.

Posted by: PC technical support | Apr 18, 2011 2:10:01 AM

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