![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
SEC charges insider-dealing ring
A group that made profits of $4.8 million has been charged with insider dealing
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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
EU banks lose relief on model test after FRTB delay
Deferment of new trading book regime to January 2025 eats into transition period for “erratic” P&L attribution test
Sunday night football and the Basel III endgame
Big banks, political advocates and housing organisations are unlikely allies in race to dropkick new capital regime
Futures exchanges seek clarity on China licensing regime
Hazy details on landmark Futures and Derivatives Law breeds legal uncertainty, unnerving operators
Some EU banks wanted option to start FRTB on time
Representatives of member states raised possibility with European Commission at July meeting discussing the delay
For US Treasury troubles, treat the cause not the symptom
Regulatory alarm about hidden risk in the Treasury futures market misses the point, fund association execs write
Iosco delays pre-hedging consultation to November
Review into controversial practice splits industry
Honey, I shrunk the Fed. (Not a sci-fi fantasy)
Promoting the discount window may be the Fed’s key to shrinking its $7trn balance sheet, says Bill Nelson