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SEC Settles Insider Trading Case With Houston Man

U.S. securities regulators settled an insider-trading case with a Texas man who allegedly bought National Semiconductor Corp. shares based on a tip about its acquisition gleaned from his wife, a lawyer whose firm consulted on the deal.

James Balchan of Houston agreed to pay almost $60,000 to settle the lawsuit, the Securities and Exchange Commission said in a statement today. Balchan bought National Semiconductor shares in April 2011 after his wife told him in confidence about the acquisition. The shares jumped more than 75 percent when Dallas-based Texas Instruments Inc. announced that month it was buying Santa Clara, California-based National Semiconductor for about $6.5 billion.

Balchan sold the shares and made a $30,000 profit, the SEC said. He agreed to disgorge the money and pay a civil fine of about the same amount. Balchan didn’t admit or deny the allegations. Stephanie McGuire, Balchan’s attorney, didn’t immediately respond to an e-mail seeking comment about the settlement.

“Spouses or other members of an attorney’s family may learn highly confidential information about a company when having a casual conversation,” Marc Fagel, director of the SEC’s San Francisco regional office, said in the statement. “Using that confidential information to buy or sell stock as Balchan did is not only a breach of trust, but also a violation of the federal securities laws.”

The case is SEC v Balchan, 13-298, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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