Advice for Young Lawyers

Yesterday, the SEC settled insider trading charges against James Self and Stephen Goldfield. Self was director of Business Development at Merck and Goldfield, Self's classmate at the Wharton School (UPenn), was a hedge fund manager.  According to the complaint, Self disclosed confidential inside information about Merck's pending acquisition of MedImmune to Goldfield.  Goldfield traded on that information and according to the complaint made approximately $14 million in profits.  

 

Here's the thing.  Self didn't make any money on this deal.  In fact, he didn't "profit" at all.  Rather, he provided the information for reasons that most Facebookers will readily recognize. According to the SEC, "Self divulged the confidential information to Goldfield in order to boost his reputation in Goldfield's eyes and to show Goldfield that he was working on important matters"

 

Hey, I get it.  Your buddy got out of Wharton and immediately joined a hedge fund.  As near as you can tell, he's making a gazillion dollars a year, has houses in three cities, and leads a glamorous life-style.  You?  Well, you were smart, but you decided to work for Big Pharma.  You might not be rolling in cash, but you're doing important work.  There's a natural inclination to let others know that you, too, are important, that you, too, are a bid deal.  Like I said, I get it. 

 

But ... get over it.  Before you start first day at that fancy law firm.   Here's some advice - it's time to learn to be discreet.  You may not brag to hedge fundies you know from law school about deals you are working on.  (Who would be that stupid?)  But you may do other things.  I know everyone always has to have a status update on their Facebook page or gchat that lets everyone know what exactly they are up to.  If you're not careful, these could get you into trouble.  How about this Facebook status update for example:   

 

"On my way to a board meeting at MedImmune.  Who wants to buy a cheap biotech company?!" 

 

Definitely a career killer.   Now might be a good time to start weaning yourself off of many of the social media sites.  Less is more.  

 

Visit the M&A Law Prof Blog, hosted by Brian JM Quinn, for blogs on legal developments in corporate governance and mergers & acquisitions.