(Adds details of other defendants and quote from lawyer)
By Grant McCool
NEW YORK Dec 18 U.S. authorities said on
Thursday a former Lehman Brothers Holdings Inc salesman tipped
friends and relatives with inside information about 13
impending mergers by divulging confidential information he got
from his wife, a public relations executive.
Matthew Devlin, of New York City, was charged with
participating in an insider trading scheme, a criminal
complaint filed in U.S. District Court in Manhattan showed. Two
day traders, a lawyer and a brokerage salesman were also
charged with illegal trades that the U.S. Securities and
Exchange Commission said netted $4.8 million in illegal
The complaint said Devlin should have known not to divulge
confidential information his wife, Nina, shared with him.
His wife is a partner in public relations firm Brunswick
Group LLC and she was not charged in the case.
Brunswick said in a statement: "The husband of a Brunswick
employee has been arrested by U.S. authorities for using
information obtained illegally from her and without her
knowledge, which has then passed to third parties."
The U.S. Attorney's office in Manhattan said Matthew
Devlin, 35, entered a plea of guilty on Dec. 16 before U.S.
District Judge Barbara Jones to a complaint charging him with
four counts of conspiracy to commit insider trading and one
count of securities fraud.
It said day traders Jamil Bouchareb, 27, and Daniel Corbin,
32, of Miami Beach, Florida and former Lehman employee
Frederick Bowers, 40, and a lawyer Eric Holzer, 34, of New York
City were arrested on Thursday on charges of conspiracy and
Bouchareb's lawyer Lilly Anne Sanchez said in a statement
that "there is no credible proof of knowledge on the part of Mr
Bouchareb and once all the true facts are revealed he will be
A lawyer for Bowers said his client would fight the
charges. Lawyers for the other defendants could not be reached
Court documents showed that the government accused them of
illegal trades in transactions including Novartis AG NOVN.VX
acquiring Eon Labs in 2005 and Alcoa Inc's (AA.N) hostile offer
for Alcan in 2007.
In a statement, James J. Benjamin, Jr., partner in the law
firm of Akin Gump Strauss Hauer & Feld LLP and counsel for Nina
Devlin, said: "She was completely unaware that confidential
information about her job was being used as the basis for
securities trading. She is devastated by this terrible
A separate complaint in the same alleged insider trading
ring was filed by the U.S. Securities and Exchange Commission
on Thursday against seven people and two companies. It said the
trades yielded more than $4.8 million in illegal profits
between March 2004 and July this year.
Lehman Brothers went bankrupt in September and was
partially taken over by Barclays.
"Barclays Wealth and Lehman Brothers prior to its
acquisition cooperated fully with law enforcement authorities
to assist them in their investigation into this alleged insider
trading ring," Barclays said in a statement.
The SEC said that some traders referred to Devlin and his
wife as the "golden goose."
The SEC complaint also said that in exchange for providing
inside information, Devlin was rewarded with cash and luxury
goods like a Cartier watch, a Barneys New York gift card, a
wide-screen TV and a Ralph Lauren leather jacket.
(Editing by Toni Reinhold and Gary Hill)