(Reuters) - A former partner at the law firm Fox Rothschild was sentenced on Friday to six months in prison for trading on inside information that a client at his law firm was about to announce a merger, prosecutors said.
Herbert Sudfeld, 64, was sentenced by U.S. District Judge Cynthia Rufe in Philadelphia after a federal jury in February found him guilty on charges of securities fraud and making a false statement.
He was also ordered to pay $77,000 in restitution, which his lawyer, Robert Welsh, said will be considered satisfied once Sudfeld pays $91,747 plus interest to the U.S. Securities and Exchange Commission in a related civil case.
The sentence was confirmed by the U.S. Attorney’s Office in Philadelphia. Welsh, who called the sentence “very fair,” said Sudfeld had not yet decided whether to appeal his conviction.
Prosecutors said that Sudfeld engaged in insider trading while he was a partner at Fox Rothschild, which represented insurer Harleysville Group Inc in its $760 million merger with Nationwide Mutual Insurance Co [NMUIC.UL] in 2011.
According to an indictment, Sudfeld, a real estate lawyer, learned that his partners at the large law firm were representing Harleysville two days before the merger was announced, and bought stock in the company.
When the deal was announced, Harleysville’s stock price jumped about 85 percent. Sudfeld then sold the shares he had bought just a day earlier, earning profits of $75,530, prosecutors said.
Prosecutors said Sudfeld, who stopped working at Fox Rothschild in 2012, later made false statements to Federal Bureau of Investigation agents.
The case is U.S. v. Sudfeld, U.S. District Court, Eastern District of Philadelphia, No. 15-cr-00330.
Reporting by Nate Raymond in New York; Editing by Jonathan Oatis