by The FTC sued to block the largest supermarket merger in US history. The regulator moved to block Kroger’s $25 billion bid for Albertsons, warning that the deal would raise prices and hurt union workers’ bargaining power.
Insider trading from home
The husband of a former BP mergers and acquisitions manager who pleaded guilty this month to listening to his phone calls and then using what he had learned to illegally earn $1.76 million is not the only one exploiting remote work to gain confidential information. There is also, for example, the chief compliance officer (yes, the chief compliance officer!), accused of trading on information he stole from his girlfriend’s laptop. (He pleaded guilty under a cooperative agreement with the Department of Justice.) Or the husband who, while his wife was taking work calls on the way to a family vacation, heard that his company would not meet earnings expectations and was soon accused of insider trading. (He agreed to pay the SEC more than $300,000 to resolve the charges, without admitting or denying the allegations.)
It’s not a new problem, but the post-Covid era of remote work has made it more prevalent. And companies are not prepared. “Many employers have pretty rigorous data protections in place,” said Laura Sack, partner at Davis Wright Tremaine. “Less attention is being paid to less sophisticated ways of violating confidentiality, such as having a conversation that is overheard.”
Treating family as an exception to confidentiality is a common but risky approach. “Do I think that happens every day? Yes,” said Robert Hinckley Jr., a shareholder in Buchalter’s Denver office. “As a lawyer, do you do that? No.” Sack cites the worst-case scenario: You share confidential information with your spouse, and then when they break up, that person tries to use it against you. Ellenor Stone, a partner at Morris Manning & Martin, says she sometimes tells her clients about a former high school principal who was awarded an $80,000 discrimination settlement, which the school later refused to pay, citing a confidentiality agreement, after his daughter posted about it on Facebook.
Can confidential conversations even take place in the work-from-home era? Stone, who often works on sensitive personal issues, says that if she knows someone else can overhear her, even at home, she will send a message to the person she’s talking to and create keywords for the conversation, such as, “When I say Bob “I’m talking about Brian, and when I talk about back surgery, I’m talking about Brian’s heart condition.” Sack said that during the pandemic, her husband had referred to their parked car as a “mobile office” because It was often the only place where he could guarantee he wouldn’t be within earshot of anyone else.
