Finally, A Family-Friendly Insider Trading Arrest

These days, with all the talk of slippery New England hedge funds, grey area-dwelling expert networks and mosaic-style data-aggregation tactics,

These days, with all the talk of slippery New England hedge funds, grey area-dwelling expert networks and mosaic-style data-aggregation tactics, it can be tough to remember a time when insider trading was simpler. More pure. More family-focused.

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That’s why it’s so reassuring to read in today’s New York Times that the latest arrest in the Securities and Exchange Commission’s crackdown on insider trading involved a husband-and-wife team that allegedly passed on insider tips to overseas family members. Arnold and Annabel McClellan, said SEC enforcement director Robert Khuzami, “Might have thought that they could conceal their illegal scheme by having close relatives make illegal trades offshore. They were wrong.”

At least family is important to someone. Those allegedly dealing in the San Francisco couple’s tips were not homewrecking former beauty queens, but rather the McClellans’ in-laws, Miranda and James Sanders. The two couples have evidently remained close, despite distance; the Sanders family was arrested in London along with three other people. The Times reports:

In the case against the McClellans, the S.E.C. contends that Mr. McClellan, a 51-year-old mergers and acquisitions tax partner at Deloitte, told his wife about pending acquisitions, and she in turn passed them on to the Sanders in London. The Sanders then traded on the information. The scheme gradually snowballed, and Mr. Sanders began passing the tips to his father and to colleagues at his trading firm.

Ms. McClellan, 38 and previously an employee at Deloitte, was to receive kickbacks from her relatives in Britain on the illicit trades, the complaint says.

This alleged operation isn’t the same corporate, unfeeling enterprise we see all too often today. According to authorities, it started as a small mom-and-pop shop and slowly built up, the old fashioned way. In a time when it seems like every fraud-related arrest involves some element of debauched infidelity, it’s comforting to see a few accused insider traders are still doing it the way our parents did, back in the good old days.

mtaylor [at] observer.com | @mbrookstaylor

Finally, A Family-Friendly Insider Trading Arrest