Lehman broker 'ran $4.8m insider trading ring'
Friday 19 December 2008
A Lehman Brothers broker whose wife works for the public relations firm Brunswick has been charged with running a $4.8m insider trading ring, using information about the merger and acquisition deals that his wife was working on.
Matthew Devlin and eight of his friends, colleagues and clients were named in lawsuits filed last night, accused of profiting from secret information about the recent takeover bids for Anheuser-Busch, maker of Budweiser, and the video games company Take-Two Interactive, and at least 10 others.
The gang of alleged insider traders referred to Nina Devlin, who works in Brunswick's New York office, as "the golden goose", according to the lawsuits. Mrs Devlin's lawyer said she was "devastated" to learn about the allegations against her husband, which Brunswick described as "a violation of trust between husband and wife".
Mr Devlin is accused of snooping on his wife's work and piecing together information from the details of her travel schedule, as she went to visit clients involved in M&A activity.
The tip-offs allowed him to curry favour with his friends and business associates and, in return, he was rewarded with cash and luxury items, including a Cartier watch, a Barneys New York gift card, a widescreen TV, a Ralph Lauren leather jacket and Porsche driving lessons, it is alleged.
Among the people alleged to have taken part are a Playboy magazine Playmate of the Month from 1994, Maria Checa, now 38, whose boyfriend Jamil Bouchareb, 27, was a day-trader friend and client of Mr Devlin. In an email to a co-conspirator cited in the lawsuit, Mr Bouchareb wrote: "We need the goose to pop its head out and show us the biz. Where has my goose gone? Come back little goose."
Mr Bouchareb's lawyer said the facts are not as presented by prosecutors and he intends to plead not guilty. He is among four men facing criminal charges of conspiracy and securities fraud in a lawsuit published last night. The other three are Daniel Corbin, a day trader, Eric Holzer, a tax lawyer, and Frederick Bowers, another Lehman Brothers broker in New York. Mr Devlin has pleaded guilty to other criminal charges and helped trap his co-conspirators, the lawsuit reveals. All five are among 12 defendants and relief defendants – nine individuals and three related companies – in a civil lawsuit filed by the Securities and Exchange Commission yesterday.
Mrs Devlin's lawyer, James Benjamin, said: "She was completely un-aware that confidential information about her job was being used as the basis for securities trading. She is devastated by this terrible situation."
The wealth management business of Lehman Brothers was among those taken over by Barclays when the in-vestment banking giant collapsed this year. Barclays said yesterday it had co-operated fully with the criminal investigation. Brunswick said there was no indication that Mr Devlin accessed Brunswick's confidential systems.
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