On March 31, 2014, the SEC brought two unrelated cases that they announced together because of the common denominator noted in the headline of the SEC's press release: 

"SEC Charges Two Men With Insider Trading on Confidential Information From Their Wives"

As the founder, chairman and CEO of the Familial Betrayal Advisory System here at Compliance Week (see the handy chart above), I am, of course, delighted to see the SEC join me in calling out the many husbands, wives, brothers, sisters, brothers-in-law, boyfriends, and fathers who have fallen into the SEC's cross-hairs for betraying their loved ones.

The two new members of the Familial Betrayal club are:

1. Ching Hwa Chen: The SEC alleges that Chen overheard business calls by his wife in which he learned that her company, Informatica Corp., would miss its quarterly earnings target for the first time in 31 consecutive quarters. Despite the fact that Chen's wife had previously advised Chen not to trade in Informatica securities under any circumstances, Chen did so anyway, and made illegal profits of nearly $140,000 when news of the bad quarterly earnings became public. 

2. Tyrone Hawk: The SEC alleges that Hawk traded in shares of Acme Packet "after he overheard work calls made by his wife, a finance manager at Oracle Corp., regarding her company's plan to acquire Acme Packet Inc." Hawk allegedly made approximately $150,000 through this trading.  The SEC alleges that Hawk's wife also told him that there was a blackout window for trading Oracle securities because it was in the process of acquiring another company.

Based on our Familial Betrayal Advisory System precedents, I believe both of these cases belong in the Betrayal Level: Guarded ("Counseling Required") category, as they are both most comparable to cases such as SEC v. Rocklage, a case previously placed in the Guarded level.  In Rocklage, the wife of the CEO of Cubist Pharmaceuticals told her husband that she intended to signal her brother to sell his Cubist stock after her husband informed her of the negative results of a clinical trial involving one of Cubist's most important products. Her husband urged her not to do so but she did so anyway, allowing her brother to avoid a loss of nearly $100,000 when Cubist stock plummeted.  

Neither of these new cases involve the level of outrage required to rise to the level of Elevated (”Clothes Thrown Out Window”). Cf. SEC v. Edelman ("Elevated" case involving express caution from girlfriend not to trade, a supposed agreement not to do so, and a post-betrayal break-up).

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