A Pacific Heights housewife from San Francisco was sentenced in federal court today to 11 months in prison for lying to a regulatory agency about her transmission of insider trading tips to her sister and brother-in-law in London. Annabel McClellan, 38, pleaded guilty before U.S. District Judge William Alsup in April to one count of obstructing the due administration of law by making false statements to investigators from the U.S. Securities and Exchange Commission in 2009.
She was sentenced by Alsup in San Francisco today. U.S. Attorney Melinda Haag said that in her plea agreement,
McClellan admitted to obtaining confidential information by overhearing discussions by her husband, an accounting firm partner, about corporate transactions. McClellan admitted to lying under oath to SEC investigators about her role in conveying the information to her sister, Miranda Sanders, and her brother-in-law, James Sanders, who was a London markets trader, Haag said. McClellan’s husband, Arnold McClellan, 51, was formerly a partner in the accounting firm Deloitte Tax LLP and was in charge of regional mergers and acquisitions, according to a related civil lawsuit filed by the SEC
against the couple in federal court in San Francisco last year.
Last month, the SEC announced it had settled the civil lawsuit and that Annabel McClellan had agreed to pay a fine of $1 million. The SEC dismissed the civil allegations against Arnold McClellan, who was not charged in the criminal case. Annabel McClellan’s defense lawyers said in a sentencing brief that she obtained the confidential information in 2007 and 2008 by listening to her husband’s business calls and looking at his papers without his knowledge.
Prosecutors alleged in a sentencing brief filed last month that Annabel McClellan’s wrongdoing defrauded British investors of about $3.05 million. McClellan grew up in England and met her husband while working as a tax professional in London, defense attorneys said in their brief. Her sister and brother-in-law are facing insider trading charges filed in London by the United Kingdom Financial Services Authority, according to the SEC. McClellan was ordered to begin serving her sentence on Jan. 2, Haag said.
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