Yesterday, the SEC announced an insider trading action against Herbert K. Sudfeld, a former attorney with law firm Fox Rothschild. The SEC alleged that Sudfeld engaged in insider trading in the stock of Harleysville Group, Inc. in advance of a merger on which Sudfeld's firm advised Harleysville. Sudfeld allegedly made $79,000 in illegal profits.

According to the SEC, Sudfeld did not work on the merger himself but learned about it two days before the announcement from a legal assistant that he shared with several lawyers who advised Harleysville on the transaction. Sudfeld and the legal assistant were allegedly close friends who had worked together for decades and jointly owned a vacation home.

As noted here by Nate Raymond of Reuters, the case against Sudfeld does not appear to be an isolated incident for the law firm advising on this transaction. On February 3, 2015, the SEC filed a similar case against Joel J. Epstein for insider trading in Harleysville Group stock prior to the same merger announcement. Epstein allegedly learned about the merger from his son, who in turn learned about it "from his long-time girlfriend who was a legal assistant at a law firm that was advising Harleysville on the transaction." Sounds familiar! Epstein allegedly made over $113,000 in illegal profits, and tipped four other people who combined to make another $123,000 in illegal profits.

I'm not even going to get into it again, as my prior efforts to get public company employees, investor relations executives, and yes, lawyers, whose firms are involved in merger transactions to wise up and not engage in insider trading have sadly fallen on deaf ears. I'll just repeat what I said in 2009, as it seems to be just as appropriate here:

The chance of this lawyer getting away with the insider trading alleged by the SEC was Z-E-R-O, and that is only because we cannot go below zero, otherwise it would have been lower. I've tried to explain this before. It remains a mystery to me why people with a zero percent chance of success will take that chance, even when they have so much to lose.