Insider information passed between two members of Alcoholics Anonymous is sufficient to sustain allegations that one of them violated the Securities Exchange Act, a federal judge has ruled.
U.S. District Judge Timothy Savage of the Eastern District of Pennsylvania denied Timothy McGee’s motion to dismiss the securities fraud charges against him, which were filed after he allegedly made a $292,000 profit from the sale of Philadelphia Consolidated Holding Corp. shares following the company’s merger with Tokio Marine Holdings in 2008. McGee learned about plans for the merger shortly before it was made public in the summer of that year when a friend he made through Alcoholics Anonymous confided in him that he was struggling with his alcoholism because of the stress he was under at work because of the merger. He was a senior executive at Philadelphia Consolidated Holding.
