
SEC charges insider-dealing ring
Daily news headlines
According to the SEC's complaint, Devlin got the inside information from his wife, a partner in the New York City office of an international public relations firm working on the deals. Because the inside information was valuable, some of the traders referred to Devlin and his wife as the 'golden goose'. The SEC's complaint further alleges Devlin was rewarded with cash and luxury items for providing inside information, including a widescreen TV, a leather jacket and Porsche driving lessons.
The SEC alleges the illicit trading occurred from at least March 2004 through to July 2008, and yielded more than $4.8 million in profits. Related criminal charges by the US Attorney's Office for the Southern District of New York have also been unsealed against some of the defendants named in the SEC's complaint.
"The Commission is unwavering in its determination to pursue illegal insider trading by securities professionals, lawyers, and others," says Linda Chatman Thomsen, director of the SEC's enforcement division. "Today's enforcement action is another example of the exemplary working relationships among the SEC, criminal authorities, Finra [the Financial Industry Regulatory Authority] and other self-regulatory organisations."
Antonia Chion, associate director of the SEC's enforcement division, adds: "As alleged in our complaint, many of the defendants took steps to evade detection. This case demonstrates the SEC's ongoing commitment to pursuing sophisticated insider-trading schemes."
Although many of the defendants had accounts with Lehman, says the SEC, they often attempted to avoid detection by trading in the securities of the target companies in numerous accounts that were not associated with Lehman or Devlin. To further conceal their illicit trading, at least two of the defendants sold off some of the shares they had purchased based on inside information prior to public announcements of the deals. Devlin and one of his tippees also arranged to buy shares on Devlin's behalf so that he could profit from the non-public information but evade scrutiny. When this accomplice's name appeared on a watch list, Devlin agreed with him to stop providing the inside information.
The other defendants include business partners, clients and friends of Devlin. Four of the men allegedly involved in the ring - traders Jamil Bouchareb and Daniel Corbin, tax lawyer Eric Holzer and Frederick Bowers, a Lehman broker - have been arrested by the FBI and charged with conspiracy and securities fraud.
Click here for the SEC complaint.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
HKMA launches consultation on green taxonomy
Regulator could use proposal to assess progress of banks towards climate goals
After SVB downfall, EBA stress test seeks out unrealised losses
European regulator asks for data on the fair value and sensitivity of bonds and their hedges
EU banks fear Brexit battle over FRTB internal models
Bank of England approach looks easier, but that may not make much difference to model uptake
Europe’s new IRRBB test: the riddle with no answer
A proposed compromise on net interest income test is not scientific, but exact calibration may be impossible
Eurex clearing chief calls for active account carve-outs
Isda AGM: Müller says EU clearing thresholds should exempt market-making and US client trades
The regulator that troubleshoots first, asks questions later
Canada’s bank watchdog aims to intervene early to tackle burgeoning risks, even at the expense of “perfect” regulatory decisions
Banks dispute EBA’s new threshold for IRRBB test
Banks say new proposal for identifying outliers on net interest income is still too severe
Investor wish-list offers no quick fix for Swiss CoCos
Some want bond doc overhaul to clarify bail-in risk, but sovereigns can always change the rules