Insider affair

Talk about your cautionary tales: The WSJ's Dennis Berman tells the story of an Ernst & Young partner who was foolish enough to log onto a Web site for married people looking to have affairs and he came across a Philadelphia woman. The two began swapping phone calls and text messages - and that led to trysts in NY, Philly and California. Then, things between James Gansman and Donna Murdoch really got interesting.

Eventually the two settled into a comfortable day-to-day routine in their respective offices in New York and Philadelphia, staring at the same Yahoo Finance screen. Mr. Gansman led Ms. Murdoch in a guessing game about which deals he was working on, she said. "The game was that I wouldn't be looking and he would give me hints: The market cap of two billion or market cap of 400 billion, and here's what they do, and he'd read it to me, and ultimately make sure I guessed," Ms. Murdoch testified. Before long, the guessing game fell away. Mr. Gansman told her more directly about upcoming deals of Ernst clients, she said.

Things got still more interesting - Murdoch and her husband owed $1.45 million on a subprime home mortgage, and she needed money to make trades.

She said she found the financial support of another man she met on Ashleymadison.com. According to her, he was Richard Hansen, currently listed as the chairman of an Oaks, Pa., broker-dealer called Keystone Equities Group. Ms. Murdoch became an employee of Keystone, and she shared Mr. Gansman's stock tips with Mr. Hansen, she testified. She didn't tell either man about her relationship with the other, she said.

As time went on, Mr. Gansman grew closer to Ms. Murdoch. He shared part of his 2006 bonus check, making Ms. Murdoch a $25,000 loan, she said. In one instance, he leaked news of a coming takeover with Ms. Murdoch, to be used in one of her children's stock-market simulation games at school, she testified. Between November 2005 and September 2007, Ms. Murdoch traded on at least 18 different Ernst deals, netting about $400,000 in profits, prosecutors said.

In the end, the feds caught up with Gansman. He wound up being convicted on six counts of securities fraud and faces three to four years in jail. Murdoch cut a deal with prosecutors, pleading guilty to 15 counts of securities fraud and agreeing to testify against Gansman. She hasn't been sentenced. "Fatal Attraction" has got nothing on this.