Inside And Out
An attorney who was the subject of an SEC insider trading investigation has filed a consent to disbarment in the District of Columbia.
Law 360 had this January 2012 report
The U.S. Securities and Exchange Commission on Monday resolved its case against former Dewey & LeBoeuf LLP employment attorney Todd L. Treadway, who was accused in New York federal court of trading in the stock of companies whose acquisitions he had helped advise.
Treadway was fined slightly more than $40,000 for his conduct, which covers the $27,000 he made in illicit profits, plus $3,000 in prejudgment interest and a $10,000 civil penalty.
U.S. District Judge Richard J. Holwell said in his judgment Monday that because of Treadway’s statement of financial condition, which was not available, and other unspecified documents, he would not impose a greater penalty.
Treadway was also banned from further securities law violations. He lost his job with Dewey in November 2008.
The former associate in Dewey’s employee benefits and employment practice group made $27,000 on two trades based on inside information about buyers and sellers in major deals, the SEC alleged in its suit, which was filed in March.
In July, he lost his bid to strike 12 paragraphs from the SEC’s complaint concerning his employment status at the firm and his access to inside information, arguing the claims at issue were immaterial and derogatory.
Judge Holwell also rejected Treadway’s attempt to nix in its entirety a paragraph describing his familiarity with the firm’s confidentiality policy, saying he did not give any reason for striking it and that the court could see none.
According to the SEC, in June 2007, Treadway bought stock in Accredited Home Lenders Holding Co., prior to the company’s announcement that it would be acquired by Lone Star US Acquisitions LLC in a $400 million deal.
And in May 2008, he purchased securities in CNET Networks Inc. ahead of that company’s $1.8 billion acquisition by CBS Corp., the regulator alleged.
In addition to the alleged insider trading, Treadway also attempted to hide his activity from the Financial Industry Regulatory Authority Inc., the complaint said. When the agency began investigating certain trading activity related to the CNET acquisition, it said, it sent a list of names to Dewey employees that were involved in the transaction, asking them to identify anyone on the list that they knew and their relationship with that person.
According to the complaint, Treadway’s fiancee was on the list, having been involved in his CNET trading, but he responded to FINRA’s inquiry by claiming he did not know anyone on the list.
Treadway, who represented himself in the case, could not immediately be reached for comment Monday.
The case is U.S. Securities and Exchange Commission v. Todd Leslie Treadway, case number 1:11-cv-01534, in the U.S. District Court for the Southern District of New York.
The fact of the consent is a matter of piublic record. The affidavit that admits the misconduct is not.
He was publicly reprimanded by consent in Virginia for failing to respond to the bar’s initial inquiry into the SEC matter. (Mike Frisch)