Lehman Bros. Rep Accused of Inside Trading

MANHATTAN (CN) - Lehman Bros. trader Matthew C. Devlin made hundreds of thousands of dollars trading on inside information about mergers that he got from his wife, who worked for an international public relations firm, federal prosecutors say. Devlin and his co-conspirators made $4.8 million from the illegal trades, the SEC says in a separate complaint.

Devlin, a registered representative, and his co-conspirators made a bundle by using Devlin's wife's information to trade ahead on shares of Eon Labs, Mylan, Amgen, Ameristar Casinos, Compagnie Generale de Geophysique, Mercantile Bankshares, Alcoa, Roche Holdings; Celgene, Take-Two, Dow Chemical and InBev, the U.S. Attorney's Office claims in its complaint.

The U.S. Attorney's complaint identifies Devlin's employer only as "a multinational investment bank and broker-dealer." The SEC identified his employer as Lehman Bros. in a separate lawsuit.

In a separate federal complaint, prosecutors accuse Jamil A. Bouchareb and Daniel A. Corbin of participating in the scheme. They allegedly worked together to disguise Devlin's role as the source of the inside trading.

Bouchareb and Corbin are accused of participating in illegal trades on shares or options of Eon Labs, Abgenix, Mercantile Bankshares, Alcan, Ventana Medical Systems, Pharmion Corp., and Rohm & Haas Co.

A third federal complaint accuses Eric A. Holzer of inside trading in shares or options of Invision Technologies, Eon Labs and Abgenix.

A fourth federal complaint accused Frederick E. Bowers of inside trading in shares or options of Aztar Corp. and Mercantile Bankshares.

The SEC complaint rolls it all up into one.

Devlin is accused of running the scheme from February 2005 through August 2008. Devlin also is accused of taking kickbacks from the others.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit