[JURIST] The US District Court for the Eastern District of Pennsylvania [official website] issued an indictment [PDF] Thursday against real estate lawyer Herbert Sudfeld for alleged insider trading. The charges include securities fraud, three counts of making a false statement to the Federal Bureau of Investigation [official website] and aiding and abetting. The indictment suggests that Sudfeld overheard a colleague discussing an imminent future merger between the Pennsylvania law firm’s client Harleysville Group, Inc. and Nationwide Mutual Insurance Company and illegally used the information when he purchased stock in the client’s company. The indictment states that Sudfeld, a former partner at Fox Rothschild LLP [website], breached his fiduciary duty to the firm’s client when he used the non-public information to engage in a scheme that netted him a total of $75,530. Sudfeld’s lawyer said [Reuters report] his client would plead not guilty at his arraignment on Monday.

Insider trading is a concern for US securities regulators. In April the US Supreme Court denied [JURIST report] an appeal brought by Rajat Gupta, the former director of the Goldman Sachs Group Inc, for his 2012 insider trading conviction. Gupta was convicted [JURIST report] on three counts of securities fraud and one count of conspiracy to commit securities fraud in June 2012. The convictions rested largely on telephone conversations between Gupta and Raj Rajaratnam, head of the Galleon Group hedge fund firm where Gupta disclosed financial and investor information of Goldman Sachs. Gupta was sentenced to two years in prison, one of supervised release, and ordered to pay $5 million dollars in fines. Rajaratnam was convicted in 2011 and sentenced [JURIST reports] to 11 years in prison and $64 million dollars in fines, the largest sentence to ever be awarded for insider trading. Rajaratam appealed to the Second Circuit in 2013, but the conviction was upheld [JURIST report].