Here's a nightmare scenario: You're a top corporate tax lawyer involved in mergers and acquisitions. You talk openly about the deals with your wife, who used to be in business herself but is now a part stay-at-home mom, part socialite, and part mobile phone app entreprenuer.
Everything is going great: you're making tons of money, know lots of interesting people, and have a huge home in the hills of San Francisco that you and your wife have lovingly restored. You take trips abroad to places like London.
Then, one day, federal authorities show up and arrest you and your wife on charges of insider trading, a serious felony punishable by years in prison.
It turns out that your wife has been passing along tips about the deals you're working on to her sister and brother-in-law in London, and the brother-in-law -- an investor -- is making millions with the information.
This scenario is pretty much Arnold McClellan's recent life in a nutshell. At least as his wife Annabel McClellan tells the story. In pleading guilty to charges last week related to insider trading, McClellan claimed that she acted alone and that Arnold, now a former partner at Deloitte Tax LLP, was not involved.
As reported in Bloomberg Businessweek: “Annabel McClellan has apologized to the SEC and her husband, who had no knowledge of or involvement in her wrongdoing,” according to an e-mailed statement released today by Nanci Clarence, her lawyer. “She accepts that she will serve a sentence in prison, and takes full responsibility for what she has done.”
When this case was first revealed, Arnold McClellan's lawyers released a strongly worded statement. We see similar statements all the time by offenders who later plead guilty. But if Arnold is innocent, and it does look that way, you can understand the rage that was so thinly veiled in his lawyers' statement:
"Arnold McClellan denies the SEC's claims and will vigorously contest them," Elliot Peters and Christopher Kearney of Keker & Van Nest LLP said in a statement on behalf of McClellan. "He did not trade on insider information, and there will be no evidence that he passed along any confidential information to anyone." McClellan "had no financial incentive to commit the actions alleged," the lawyers added. "He is a conscientious, law-abiding professional with a 23-year unblemished track record of client service at Deloitte to prove it."
This guy must feel like his life was nuked out of the blue. I wonder whether he'll get his job back. I doubt it. As for his future with Annabel, well, best of luck for that marriage.