A recent story detailing a new method of insider trading was bought to my attention this week and I thought I'd share.
A New York based attorney by the name of Matthew Kluger dealing with mergers and acquisitions was arrested on suspicion of insider trading. Usually, an attorney with access to secret documents regarding future mergers would be an obvious suspect. However, this attorney thought he was being clever by using information from mergers he wasn't working on in order to throw investigators off the scent. He was merely looking at the titles of other documents in his companies document management system, files he didn't have access to.
He was able to discern enough information from these document titles and summaries to make a tidy profit but most importantly as he never opened the main document no records of his access were ever left.
This small sliver of information passed to two friends working on Wall Street and as a mortgage broker is alleged to have netted the group $32 million. From the titles of documents! In the end it seems the group were caught by the age old method of following the money back to them.
This scheme is incredibly elegant in it's simplicity and perfectly illustrates how the smallest detail can be exploited, but also must be guarded.
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