[ by Melanie Gretchen ]

A former Lehman Brothers RR who pled guilty in federal court to securities fraud and conspiracy to commit securities fraud is now facing action from the SEC.

SEC Findings and Allegations. Matthew Devlin, 38, was an RR associated at Lehman Brothers, Inc., a registered broker-dealer and investment adviser, from at least 2000 through 2008.  From March 2004 through July 2008, Devlin engaged in an illegal insider trading scheme in which he traded on and tipped at least 4 of his clients and friends with material, nonpublic information he had obtained in breach of a duty of trust and confidence.

Getting information from his wife who was employed by an international communications firm that was working on the deals, Devlin misappropriated confidential nonpublic information about 13 upcoming corporate transactions from his wife, a partner in the New York City Office of an international public relations firm which was working on the deals.  With this information, Devlin's clients and friends reaped hundreds of thousands of dollars by buying the common stock and/or options of the following companies:

Abgenix, Inc., Alcan, Inc., Anheuser-Busch Co., Aztar Corp., Eon Labs, Inc., Invision Technologies, Inc., Mercantile Bankshares, Corp., Mylan Laboratories, Inc., Pharmion, Corp., Rohm and Haas Co., Take-Two-Interactive Software, Inc., Ventana Medical Systems, Inc., and Veritas DGC, Inc.

At the time, each company was confidentially engaged in a significant transaction that involved a merger, tender offer, or stock repurchase.  For his information, Devlin in turn received thousands of dollars in cash and other benefits from his friends and business associates for providing them the inside information.

SEC Sanctions. In the federal case, United States v. Devlin, 08 CR 01307 (WHP), Devlin on 3/23/12 was sentenced 3 years of probation and ordered to pay a fine of $10,000 and a special assessment of $500 and to forfeit $23,000 of proceeds traceable to the commission of the offenses.  In the civil case, the SEC on 10/19/13 permanently enjoined him from future violations of Sections 10(b) and 14(e) of the Exchange Act [15 U.S.C. §§ 78j(b) and 78n(e)] and Exchange Act Rules 10b-5 and 14e-3 [17 C.F.R. § 240.10b-5 and 240.14e-3].

The case: Securities and Exchange Commission v. Devlin, et al., Civil Action Number 08-CV-11001,

For further details, go to [SEC Administrative Proceeding File No. 3-15315, 5/6/13].