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by Mike Caswell

Richard Hansen, the former investment banking executive jailed for his role in the "sex and stocks" insider trading case, has agreed to a permanent brokerage ban and to a ban that prohibits him from serving as an officer or director of a public company. The penalties, which settle a civil suit from the U.S. Securities and Exchange Commission, are contained in a proposed final judgment filed in New York on Monday, Oct. 3, and in an administrative SEC order.

The settlement comes five months after Mr. Hansen, 71, received three months in jail in a parallel criminal case. Prosecutors said that he traded on information he received from Donna Murdoch, a woman he met on the AshleyMadison website. The site caters to people seeking extramarital affairs. Ms. Murdoch tipped him about two takeovers, including the 2006 acquisition of Markham-based ATI Technologies Inc. by Advanced Microdevices Inc. (better known as AMD).

Ms. Murdoch, who made $350,000 from the scheme, pleaded guilty to related criminal charges in 2008 and received six months of house arrest. (All figures are in U.S. dollars.) Prosecutors claimed that she received tips on multiple takeovers from another man she met on the AshleyMadison site, James Gansman, who was a partner at the New York office of Ernst and Young LLP. She traded on at least 18 takeovers, and passed tips for at least two on to Mr. Hansen.

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