In a release, the SEC said defendant James Balchan misappropriated the information from his wife, a partner at a law firm that was consulting on the deal. Balchan's wife was not named in the complaint, and her law firm was not identified.
Texas Instruments announced the acquisition on April 4, 2011; in the wake of the announcement, NSC's stock price rose more than 75 percent. Balchan then sold his stock, realizing almost $30,000 in allegedly unlawful profits.
“Spouses or other members of an attorney's family may learn highly confidential information about a company when having a casual conversation," Marc Fagel, director of the SEC's San Francisco Regional Office, said in the release. "Using that confidential information to buy or sell stock as Balchan did is not only a breach of trust, but also a violation of the federal securities laws."
In settling the allegations, Balchan, who appeared pro so, agreed to pay disgorgement and prejudgment interest of $30,615.18, and a $29,052.39 civil penalty.
To view additional stories from Bloomberg Law® request a demo now