Let this be a lesson to all you law firm associates working on big corporate mergers: DO NOT leave your documents about the pending deal lying around the family home during the holidays–lest your personal injury attorney father scan them and wind up facing accusations of insider trading.
That's what happened to the daughter of Carlsbad ambulance chaser Dean Goetz, who paid a $23,000 fine to settle a complaint brought against him by the Securities and Exchange Commission (SEC) after an investigation into a merger involving a Santa Ana biotech firm.
Goetz's daughter, who was not named in the SEC complaint nor the North County Times' coverage of it, spent the Christmas holiday in 2008 at her father's home while her “large law firm” kept her busy finalizing the details of Abbott Laboratories' merger with Santa Ana's Advanced Medical Optics.
After arriving at the family home around Dec. 17 or 18, she spread out her files, which included the draft merger document and the
merger schedule, in her father's home office. On Dec. 31, she learned the merger would be finalized on Jan. 8.
Minutes before the trading day ended on Jan. 8, her father logged onto a
trading account he hadn't used for a year and bought 900 shares of
Advanced Medical Optics in two blocks, one for $8.82 a share,
another for $8.79 a share. Abbott announced on Jan. 12 its earlier purchase of Advanced Medical Optics
at $22 a share. Goetz sold all his shares on Feb. 19 for $21.93 a share–a profit of $11,418, or 143 percent.
The SEC accused Goetz of violating the trust of his daughter and
for using nonpublic information.