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Maybe Accused Insider Trader Timothy McGee Thought Intel Obtained In AA Meetings Got A Free Pass Under Securities Laws?

Pop quiz: you’re an insider trader looking to score some fresh intel. You’ve exhausted all of your sources and what’s more, you’re sick of just hitting them up for tips– you want to make obtaining material non-public information fun again. You figure the best way to go about that is to identify a target with obvious vulnerabilities that can be exploited for profit (always a good time). Do you a) go with the Danielle Chiesi move (i.e. requesting info post or, better yet, mid-coitus) b) get ordained as a Catholic priest and press penitents for potential market moving news during confession or c) go for broke: start attending AA meetings, become someone’s sponsor and then, when he/she’s confiding in you that the stress of his/her job at a certain company has been driving him/her to down a bottle of vodka every night, move in for the kill? If you’re Timothy J. McGee, C just feels so right.

The Securities and Exchange Commission today charged two financial advisors and three others in their circle of family and friends with insider trading for more than $1.8 million in illicit profits based on confidential information about a Philadelphia-based insurance holding company’s merger negotiations with a Japanese firm. The SEC alleges that Timothy J. McGee and Michael W. Zirinsky, who are registered representatives at Ameriprise Financial Services, illegally traded in the stock of Philadelphia Consolidated Holding Corp. (PHLY) based on nonpublic information about the company’s impending merger with Tokio Marine Holdings. McGee obtained the inside information from a PHLY senior executive who was confiding in him through their relationship at Alcoholics Anonymous (AA) about pressures he was confronting at work. McGee then purchased PHLY stock in advance of the merger announcement on July 23, 2008, and made a $292,128 profit when the stock price jumped 64 percent that day.

“McGee stole information shared with him in the utmost confidence, and as securities industry professionals he and Zirinsky clearly knew better,” said Elaine C. Greenberg, Associate Director of the SEC’s Philadelphia Regional Office. “As this case demonstrates, we will follow each link in a tipping chain all the way to Hong Kong if necessary.”

From the complaint:

In early July 2008, immediately after an AA meeting, the Insider confined to McGee that he had been drinking as a result of the mounting pressure, and revealed to McGee that the source of the pressure was ongoing confidential negotiations to sell PHLY. The Insider told McGee that the stress generated from his participation in the negotiations was having a negative impact on his personal life. In response, McGee expressed interest in the details of the PHLY sale and questioned the Insider about the details fo the impending deal.

SEC Charges Five With Insider Trading on Confidential Merger Negotiations Between Philadelphia Company and Japanese Firm [SEC]

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86 Responses to “Maybe Accused Insider Trader Timothy McGee Thought Intel Obtained In AA Meetings Got A Free Pass Under Securities Laws?”

  1. Speed says:

    Harry: Airport, insider trading with one hostage. He's using her for cover; he's almost to a plane. You're a hundred feet away… Jack?
    Jack: Shoot the hostage.

  2. inlovewithpmco says:

    I am friend of Bill, i never got info

  3. Saget CFA says:

    I sucked dick for non-public info!

  4. Option D says:

    Or attend Sex Addicts Anonymous to troll for vulnerable prospects. That might be a good idea even if you're not looking for inside info.

  5. Lowly Assistant says:

    I will be watching you and if I find that you are trying to corrupt this Mohawk drinkin' son of a gun, I will bring you down, baby. I will bring you down to Chinatown.

    -Elaine C. Greenberg

  6. Bandersnatch says:

    Tits McGee's brother?

  7. PermaGuestII says:

    Ameriprise in Philadelphia < Equities in Dallas

  8. Guest says:

    The answer is A

  9. Guest says:

    Kenny L's advisor must be retired by now.

  10. TGFBV says:

    Hitting AA meetings looking for inside info. Greatest effing business there is.

  11. Martha Stewart says:

    What an idiot .. only $292,128 in profit when the stock price jumped 64 percent ?

  12. PermaGuestII says:

    Very important fact that has been overlooked. From the SEC press release:

    "McGee met the PHLY executive at AA in 1999… Their relationship eventually extended beyond AA as they occasionally trained together for triathlons"

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