A defence lawyer for suspended Linklaters associate Menglu Wang has said that she did not break the law in connection with an insider trading scheme involving her husband.

US authorities arrested Wang's husband, Fei Yan, on 12 July, alleging he pocketed nearly $120,000 (£92,000) in illegal stock trades based on confidential information shared with him by Wang, a corporate associate in Linklaters' New York office.

Yan, a research scientist at the Massachusetts Institute of Technology, was released the same day on a $500,000 (£385,000) bond. Wang, who co-signed the bond the next day, was not charged with any crimes and was not named in the criminal or civil securities fraud complaints filed against her husband. She was referred to only as "Spouse-1″.

Yet what was up until a week ago a pristine start to a Big Law career has been at least temporarily derailed as questions linger around Wang, a former editor-in-chief of Harvard Law School's International Law Review, who joined Linklaters in 2015.

Was Wang aware her husband was using her knowledge of pending corporate transactions to make profitable trades? Or was she, as one law professor put it, potentially the "victim" of a husband who breached her trust?

Wang has retained criminal defence lawyer Wayne Gosnell of New York firm Clayman & Rosenberg, who declined to answer questions about what Wang knew regarding her husband's trading.

"She is a dedicated and brilliant lawyer," Gosnell said. "She is confident when all the facts are known that the government will conclude she did not do anything wrong."

There is no doubt that Wang's story is a cautionary tale for Big Law dealmakers and their associates about the potential perils of talking about work, even with loved ones. Linklaters said it has suspended an associate pending further investigation into the case, but declined to comment on Wang. Her bio has been removed from the firm's website.

Yan is alleged to have profited from trades involving the mining company Sibanye Gold and the furniture retailer Steinhoff International Holdings, both clients of Linklaters. Wang worked on major, non-public transactions for both companies while her husband amassed purchase options of their stock, according to complaints filed by the US Attorney's Office in Manhattan and the US Securities and Exchange Commission.

In both instances, Yan unloaded all his options in the companies' stock on the day the acquisitions Wang advised on were announced. He also searched the internet for tips on how to avoid prosecution for insider trading, the government alleges, accessing an article titled "Want to Commit Insider Trading? Here's How Not to Do it."

Duty of trust

One clue as to prosecutors' thinking about Wang's involvement in Yan's alleged scheme is the term "misappropriation" in both the criminal and civil complaints. The government says Yan used misappropriated information to make the trades. It also says he owed a "duty of trust or confidence" to Wang.

Adam Pritchard, a professor at University of Michigan Law School who teaches corporate and securities law, said laws related to insider trading carve out a duty of trust or confidence in husband-wife relationships. In layman's terms, Pritchard said a husband is essentially stealing the information from his wife in a misappropriation case involving a spouse.

"In a misappropriation case, the source of the information has not done anything wrong," Pritchard said. "They are, in a certain sense, the victim. Whereas, if she had told him the information with the expectation that he would trade on it, that would be a tipper-tippee relationship and he would be complicit in her breach."

Yan is represented in his criminal case by Joshua Kirshner of Brafman & Associates, the New York firm led by Benjamin Brafman, who currently represents pharmaceutical CEO Martin Shkreli.

Wang earned an undergraduate degree from Tufts University and graduated in 2015 from Harvard Law School. She interned at the World Bank Group in the summer of 2013, working on anti-corruption legal investigations, according to her bio on LinkedIn. She was a Linklaters summer associate in 2014, before joining the firm as an associate in September 2015.

While Wang has not been named as a defendant in any cases, law professors said it is still possible that she could face charges. That could occur if prosecutors determine that Wang was fully aware of her husband's trades as she shared information with him.

"It wouldn't be out of leftfield for him to take a plea deal and rat out his wife," Pritchard said. "Indictments do put a stress on a marriage."

Whatever the legal ramifications for Wang, there are also possible professional repercussions.

Linklaters has a policy that lawyers "maintain the confidentiality of client-related information and not use this information to trade in securities, or disclose it to others to trade on it", according to the criminal complaint against Yan. Pritchard said Linklaters would be "well within their rights" to fire Wang for talking about client-privileged work.

Joan MacLeod Heminway, a professor at University of Tennessee College of Law who previously did M&A work as a lawyer at Skadden Arps Slate Meagher & Flom, said lawyers can also be suspended or disbarred for breaching client confidences.

Heminway said she has studied so-called 'pillow-talk' insider trading cases that result from casual conversation between spouses and families. Part of her intrigue stems from her own fear of being caught up in such a scenario while working on big deals in New York.

"I would scoot my husband out of the room and say you can't listen to this conversation," Heminway said. "I don't know if she just wasn't as vigilant with this information."