Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Nightmare on Bay Street

Andrew Willis of the Globe & Mail has reported on his blog about an inside trading case involving an assistant at the blue-chip Canadian law firm Bennett Jones,  Go to the following link for the story - http://www.theglobeandmail.com/servlet/story/RTGAM.20080624.WBstreetwise20080624113640/WBStory/WBstreetwise/?page=rss&id=RTGAM.20080624.WBstreetwise20080624113640

In short, it is being reported that a legal secretary at Bennett Jones traded on insider information:

The [OSC] alleged Tuesday that 53-year-old Betty Leung bought and sold shares in eight different companies that were involved in deals with Bennett Jones as an advisor.

The OSC alleges Ms. Leung, who has been a legal secretary for 19 years, knew she had confidential information when she made frequent trades. She typically bought or sold 200 to 800 shares at a time, in accounts held in her own name, and that of her husband and parents.

The amounts involved are small, with the OSC stating that Ms. Leung made a total profit of $51,568.

Andrew Willis also reports that the U.S securities commission is making a review of insider trading activity at law firms a priority.

This type of problem should never happen.  Legal ethics is the foundation of the profession.  Risk management is the cornerstone of the law firm.  Most law firms with M&A and securities practices have policy manuals and procedures that must be followed before any person at the firm makes a trade of publicly listed shares.  Lawyers and all employees at law firms owe a duty of confidentiality to their clients and cannot talk about their client's activities outside the law firm.  It is a nightmare scenario for any lawyer to find out that an assistant has ignored the rules and duties in this manner.

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