Bucks County Law Firm Partner Charged with Insider Trading
PHILADELPHIA—Herbert Sudfeld, 64, of Doylestown, PA, was charged today by indictment with insider trading and making a false statement, announced United States Attorney Zane David Memeger.
Sudfeld was a partner in a Pennsylvania law firm that represented Harleysville Group, Inc., in its merger with Nationwide Mutual Insurance Company. According to the indictment, Sudfeld knew the merger was imminent and knew he had a fiduciary duty to keep it confidential. On September 28, 2011, prior to the public announcement of the merger agreement, Sudfeld allegedly contacted his stock broker to purchase Harleysville stock. On September 29, 2011, Harleysville and Nationwide publicly announced the merger and Harleysville stock rose by approximately 85 percent over the prior day’s trading. Sudfeld then sold the shares he had bought a day earlier, netting personal profits of approximately $75,530.
The indictment further alleges that Sudfeld falsely told FBI agents, who were investigating insider trading, that he was not aware of the Harleysville stock transactions until several days to a week later. According to the indictment, Sudfeld also falsely told investigators that he had informed his broker that he could not be involved in trades of Harleysville stock due to his position at his law firm. He further allegedly stated that he did not discuss Harleysville trades with his broker until after they were completed, which was also false.
If convicted, the defendant faces a maximum possible sentence of 25 years in prison, a three-year period of supervised release, and a $5.25 million fine.
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Denise S. Wolf.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.