Three men have agreed to settle U.S. Securities and Exchange Commission charges that they engaged in insider trading ahead of GE Healthcare’s 2010 purchase of Clarient, a cancer diagnostics company.

According to documents filed in the U.S. District Court for the Northern District of California, businessman John McEnery III allegedly tipped off his son, John McEnery IV, and a close friend, Michael Rawitser, about the acquisition.

The elder McEnery had been informed by a senior director at Clarient — a woman whom he had dated on and off since the 1990s — about the buyout. “Given their history, pattern and practice of sharing confidences, the Clarient Insider expected McEnery III to keep the information regarding the Clarient acquisition confidential,” court documents state. Instead he “misappropriate[d] the information about the Clarient acquisition to unlawfully enrich himself and others.”

The SEC accuses McEnery of “knowingly and/or recklessly” trading on the information and encouraging his son and friend to do the same. The three began purchasing shares of Clarient and sold them for a profit after the merger was announced, reeling in more than $50,000.

The three have agreed to pay a combined sum of approximately $170,000 to settle the charges, without admitting or denying the accusations. The settlement is subject to the court’s approval.

“Individuals who obtain confidential information through a relationship of trust with a corporate insider are prohibited from using that information to trade securities,” says Joseph G. Sansone, acting co-chief of the SEC’s Market Abuse Unit.  “These traders violated such a trust by using highly sensitive information to reap illicit trading profits.” — Elizabeth Hollis