Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania
FOR IMMEDIATE RELEASE
Friday, February 5, 2016
Bucks County Law Firm Partner Convicted Of Insider Trading
PHILADELPHIA – Herbert Sudfeld, 64, of Doylestown, PA, was convicted today on charges of insider trading and making a false statement. He faces a maximum possible sentence of 25 years in prison, a three-year period of supervised release, and a possible fine.
Sudfeld was a partner in a Pennsylvania law firm that represented Harleysville Group, Inc., in its merger with Nationwide Mutual Insurance Company. According to court testimony, Sudfeld knew the merger was imminent and knew he had a fiduciary duty to keep it confidential. On September 28, 2011, prior to the public announcement of the merger agreement, Sudfeld contacted his stock broker to purchase Harleysville stock. On September 29, 2011, Harleysville and Nationwide publicly announced the merger and Harleysville stock rose by approximately 85 percent over the prior day’s trading. Sudfeld then sold the shares he had bought a day earlier, netting personal profits of approximately $75,530.
Sudfeld falsely told FBI agents, who were investigating insider trading, that he was not aware of the Harleysville stock transactions until several days to a week later. Sudfeld also falsely told investigators that he had informed his broker that he could not be involved in trades of Harleysville stock due to his position at his law firm. He further stated that he did not discuss Harleysville trades with his broker until after they were completed, which was also false.
The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorney Denise S. Wolf.