The SEC yesterday announced two separate cases against men who traded on confidential information they received from their wives about Silicon Valley technology companies.

• In one case, the husband overheard a call made by his wife, an Oracle finance manager, about plans to acquire another company. She also told him that Oracle was in a blackout period. He then bought shares in the target company before the acquisition was announced and the share price rose.
• In the other, the husband learned from overhearing calls made by his wife that her company would miss quarterly earnings. He then bought a derivative security that allowed him to profit when earnings were announced and the share price fell.

Neither of those scenarios is particularly unique in and of itself. People foolishly try to get away with this kind of thing all the time and usually end up regretting it. There are, however, two interesting takeaways, which are more reminders than revelations.

First, the SEC went out of its way in its press release to note that spouses and other family members have a duty to safeguard confidential information gained as part of their “relationship of trust.” To emphasize this point, the SEC referred back to some older cases against husbands who traded on confidential information obtained from their wives. (I’m not sure why the staff was picking on husbands yesterday, other than for all the popularly cited reasons.)

Tip:  Since virtually every company’s insider trading policy specifically encompasses immediate family members, there is nothing to do on that front. Rather, it would be good to remind your insiders to regularly remind their family members of the importance of adhering to that policy.

Second, it’s interesting that both cases involved overheard telephone calls. That seemed far less common back in the olden days when such calls were typically scheduled ahead of time and taken on a land line in an office behind closed doors. Now, of course, everything is done by cell phone in real time. Business is conducted in cars, on airplanes and at kids’ soccer games. Well-meaning executives may step a few feet away or try talking softly without realizing that they still can be overheard.

Tip:  When was the last time you refreshed your insiders on the importance of confidentiality and the pitfalls created by modern communication technology? If it’s been a while, now might be a good time to do so.