The SEC announced the settlement of an insider trading case today that involves a form of material, nonpublic information that is somewhat unusual in such cases: the litigation settlement offer.

The SEC settled its case against Andres Leyva, a former Director of Strategic Marketing Analysis at Qualcomm.  Leyva allegedly profited more than $34,000 in illegal profits after learning confidential information about a "significant settlement offer" that Nokia made to Qualcomm on the eve of an important July 2008 trial between the companies. The case was to determine whether Nokia owed Qualcomm substantial royalty revenues when the companies' licensing agreement expired in April 2007. The SEC alleged that on the day before trial, Leyva learned that "Nokia had surprised Qualcomm with a significant settlement offer," and, two hours later, he purchased 80 Qualcomm call option contracts betting that Qualcomm stock would shoot up.

In fact, when Qualcomm and Nokia announced a new licensing agreement and a global settlement of all litigation between them the next day, Qualcomm stock rose 17 percent. Leyva allegedly then sold the 80 Qualcomm call option contracts for a profit of $34,739.98.