Walter Walter “Chet” Little

Almost two years since his May 2017 arrest, the government has meted out what's likely to be its last dose of punishment for former Big Law partner Walter “Chet” Little, who's already serving prison time for using confidential information on Foley & Lardner's clients to gain an investing edge.

The U.S. Securities and Exchange commission announced Friday that it secured a final judgment in Manhattan federal court against Little, 45, a former real estate and banking lawyer in Tampa, Florida, for Foley & Lardner and Bradley Arant Boult Cummings. Little and a neighbor of his, Andrew Berke, previously admitted to taking part in an insider trading scheme that collectively earned them more than $1 million in illicit profits.

The civil judgment, which Little consented to, bans him from violating parts of the U.S. Securities and Exchange Act and the Securities Act of 1933, as well as specific SEC rules. The SEC also sought to force Little to disgorge just shy of $453,000 to make up for what he individually earned through insider trading. But the agency noted in a statement that the disgorgement obligation was satisfied by Little's sentence in his parallel criminal case, which required him to forfeit the same amount.

Little pleaded guilty in the criminal case in November 2017. Federal prosecutors and the SEC had alleged that toward the end of Little's time at Foley & Lardner—where he spent more than a decade as an associate and partner—he used the firm's internal computer network to access confidential information related to business developments among the firm's clients.

Little didn't personally represent any of the clients, which included Whiting Petroleum Corp. and Harley-Davidson Inc., but he used the confidential information he accessed to make stock and option trades based on upcoming announcements at the companies. Beyond making his own trades, he tipped off his neighbor Berke, who also traded on the nonpublic information, the federal government said.

The pair used coded language in the scheme, prosecutors said. This text message from Little to Berke was allegedly a prod to buy Whiting stock, for example: “I think Publix is running a sale on Wheaties. You should pick up some tomorrow.”

After pleading guilty, Little was sentenced about a year ago to 27 months in prison and three years of supervised release. He's currently serving out his criminal sentence at a minimum security prison camp in Montgomery, Alabama, according to the Federal Bureau of Prisons, with a scheduled release date of Dec. 13.

Berke also pled guilty in a parallel criminal case and was sentenced to time served and ordered to forfeit $555,269.

Beyond its impact on Little's life and legal career, his case presented a cautionary tale for law firms tapping into the lateral partner hiring market, in part because he switched firms less than a year before his arrest. Little left Foley & Lardner in the summer of 2016 and joined Bradley Arant in July of that year.

After news of Little's arrest in May 2017, Foley & Lardner explained that, almost a year earlier, it had opened an internal investigation into potentially improper trading activity by one of its partners. As a result of the probe, Foley & Lardner sacked Little for violating firm policies and reported its findings to authorities. There was no indication that Foley & Lardner communicated with Bradley Arant about the reasons for Little's departure.

Bradley Arant then brought Little on board in July 2016. Although the firm said it had conducted extensive due diligence before hiring Little, it had no knowledge of any ongoing investigation until the former partner was picked up by authorities. Bradley Arant fired Little the day he was arrested.

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