You know, you think you've met a nice, classy lady on Ashleymadison.com, a website who's tagline is "life is short, have an affair," and the next thing you she's selling you out and you're being convicted on six counts of securities fraud. James Gansman knows what we're talking about, as he and his ho, Donna Murdoch, are the subject of a Wall Street Journal story along those lines. Gansman, an Ernst and Young partner who advised companies doing mergers about how to combine work forces before he got fired, met Murdoch in 2004. They would meet up in hotels in Philadelphia, New York and California (and when they weren't together, exchanged 7,000 phone calls over the course of two years), but what really got Big D going was this kinky little game they'd play, which went something like this:
Eventually the two settled into a comfortable day-to-day routine in their respective offices in New York and Philadelphia, staring at the same Yahoo Finance screen. Mr. Gansman led Ms. Murdoch in a guessing game about which deals he was working on, she said.
"The game was that I wouldn't be looking and he would give me hints: The market cap of two billion or market cap of 400 billion, and here's what they do, and he'd read it to me, and ultimately make sure I guessed," Ms. Murdoch testified. Before long, the guessing game fell away. Mr. Gansman told her more directly about upcoming deals of Ernst clients, she said.
Oh, but that wasn't enough for Donna. She wasn't satisfied. She needed more (money), so she met another dude who could get the job done (monetarily) and started two-timing Gansman.
The information wasn't enough to pull off an insider-trading plan. Ms. Murdoch was in such financial difficulty -- she and her husband owed $1.45 million on a subprime home mortgage -- that she needed money to make trades.
She said she found the financial support of another man she met on Ashleymadison.com. According to her, he was Richard Hansen, currently listed as the chairman of an Oaks, Pa., broker-dealer called Keystone Equities Group. Ms. Murdoch became an employee of Keystone, and she shared Mr. Gansman's stock tips with Mr. Hansen, she testified. She didn't tell either man about her relationship with the other, she said.
As time went on, Mr. Gansman grew closer to Ms. Murdoch. He shared part of his 2006 bonus check, making Ms. Murdoch a $25,000 loan, she said. In one instance, he leaked news of a coming takeover with Ms. Murdoch, to be used in one of her children's stock-market simulation games at school, she testified.
Between November 2005 and September 2007, Ms. Murdoch traded on at least 18 different Ernst deals, netting about $400,000 in profits, prosecutors said.