Lehman broker charged in insider trading case

[December 19, 2008]  NEW YORK (AP) -- A former Lehman Brothers broker who gleaned tips about pending mergers from his wife, a partner at a high-powered public relations firm, has been charged in a wide-ranging insider trading scheme that earned $4.8 million in profits for several people including a former Playboy model and two lawyers, authorities said.

Federal prosecutors in Manhattan and the Securities and Exchange Commission brought the case Thursday against Matthew C. Devlin, who authorities said enabled clients and friends to make millions of dollars while he was rewarded with gifts including cash, a Cartier watch, a widescreen television and tuition at a Porsche driving school.

"By providing inside information, Devlin curried favor with his friends and business associates and received in return cash, luxury items and other benefits," the SEC said in court papers.

The SEC said those who received tips so treasured the information Devlin took from his wife that they began referring to him and his wife as the "golden goose." Devlin, 35, of Manhattan, also referred to his wife as the "golden goose," the SEC said.

A second ex-Lehman Brothers broker, Frederick Bowers, 40, of Manhattan, was charged in a criminal complaint with conspiracy.

Marc Agnifilo, a lawyer for Bowers, said his client had "a highly minimal role in the alleged insider trading and we're going to fight the case in court and put the government to its proof." He said Bowers had never been in trouble before.

The SEC said Devlin took secrets from March 2004 through last July about more than a dozen pending mergers and acquisitions from his wife, Nina, a partner at Brunswick Group LLC, an international public relations firm.

Attorney Jim Benjamin, who represents Nina Devlin, said her husband obtained the information without her knowledge by being close to her and monitoring her travel schedule.

In a statement, Brunswick Group called the insider trading scheme a "violation of trust between husband and wife." It said there was no indication Matthew Devlin accessed Brunswick's confidential systems.

"We believe she was unaware of her husband's activities and is devastated by these events," the company said, noting that Nina Devlin has not been charged "or implicated in any way."

Brunswick is an international firm that employs more than 400 people, including more than 75 partners, as it advises major companies about financial and corporate communications and opinion research. It has 15 offices in 11 countries.

On Tuesday, Matthew Devlin pleaded guilty to four counts of conspiracy to commit securities fraud and one count of securities fraud in a cooperation deal aimed at winning leniency at sentencing.

Mary Mulligan, a lawyer for Devlin, said: "Matthew Devlin has accepted full responsibility for his conduct. He deeply regrets the pain he has caused his wife."

The SEC said Devlin gave the secrets to his clients and friends, including three who worked in the securities or legal professions.

At least four people face criminal charges, and the SEC named seven people in its civil complaint.

Those he tipped included his friend and business partner, Daniel Corbin, 32, and Jamil Bouchareb, 27, a Miami Beach, Fla., trader and friend of Devlin, the SEC said. Prosecutors said Corbin and Bouchareb, charged with conspiracy, made more than $3 million in illegal profits.

Messages left with lawyers for Corbin and Bouchareb were not immediately returned.

Also charged with conspiracy was Eric A. Holzer, 34, of Manhattan, a tax lawyer. Holzer declined to comment after a brief court appearance. Corbin, Holzer and Bowers were each released on $500,000 bail.

Prosecutors said Corbin and Devlin in January 2006 exchanged instant messages in which they agreed that there was nothing "like a golden goose." The SEC said Corbin gave tips to his father, an attorney who traded in his personal accounts on the information.

The SEC said Bouchareb shared some of his gains and tips with his girlfriend Maria T. Checa, identified in court papers as a 38-year-old Greensboro, N.C., resident who has worked as a model and actress.

Checa, Playboy's Playmate of the Month in August 1994, was listed in SEC papers as a "relief defendant," which allows the SEC to pursue any illegal profits from her but does not accuse her of wrongdoing. There was no telephone listing in Greensboro under her name.

The SEC said she used information from her boyfriend to trade in her accounts.

[Associated Press; By LARRY NEUMEISTER]

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