SEC v. James Balchan, Case No. 4:13-cv-00298 (S.D. Tx.).  On February 6, 2013, the SEC announced that it filed insider trading charges against James Balchan for trading ahead of the acquisition of National Semiconductor after he misappropriated confidential information from his wife, a partner at a law firm that was consulted on issues related to the acquisition.  The SEC alleges that a partner at the firm where Balchan’s wife worked
began organizing informal client events in honor of National Semiconductor’s general counsel.  The partner had a social friendship with Balchan’s wife and Balchan.  The partner invited the Balchans to events where National Semiconductor’s general counsel would be in attendance.  The partner later learned that National Semiconductor’s general counsel was working on the company’s impending acquisition and that the law firm was consulting on some regulatory issues related to the transaction.  National
Semiconductor’s general counsel also told the partner that he would be unable to attend the upcoming social event with firm clients.  The partner told Balchan’s wife about the
deal and she shared the information with Balchan.  According to the SEC, the next morning, Balchan purchased 2,000 National Semiconductor shares.  A few days later, he purchased another 1,000 shares.  Texas Instruments subsequently issued a press release announcing the acquisition of National Semiconductor.  Balchan is charged with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  Without admitting or denying the charges, Balchan settled by agreeing to the entry of a judgment enjoining him from future violations of the anti-fraud provisions of the Exchange Act.  He also agreed to pay disgorgement and prejudgment interest of $30,615.18, and an additional penalty equal to his profits of $29,052.39.