UPDATE: DOJ Charges Four People In Insider Trading Case
Day traders Jamil A. Bouchareb and Daniel A. Corbin; Eric A. Holzer, a tax lawyer at a New York law firm; and Frederick E. Bowers, another Lehman broker in New York; have been charged with conspiracy and securities fraud. The men are expected to appear before a U.S. magistrate judge in Manhattan later Thursday.
Holzer, 34 years old, and Bowers, 40, were arrested by the Federal Bureau of Investigation at their residences on Thursday morning. Bouchareb, 27, and Corbin, 32, were taken into custody by the FBI in Florida on Thursday.
They also are among a group of people charged in a separate civil case brought by the U.S. Securities and Exchange Commission on Thursday.
Holzer's law firm isn't named in court documents, but he matches the description of a lawyer at Paul, Hastings, Janofsky & Walker LLP. A call to the firm's chairman wasn't immediately returned Thursday.
According to court documents, they were among a group of clients and friends tipped by Matthew C. Devlin, a Lehman Brothers broker, about 12 planned deals before their public announcements between 2005 and 2008. (The civil SEC complaint also mentions a 13th deal in 2004.)
Devlin allegedly obtained the information from his wife, who worked at communications firm Brunswick Group, according to court filings.
The deals included Novartis AG's (NVS) acquisition of Eon Labs in 2005; Electronic Arts Inc.'s (ERTS) hostile bid earlier this year for Take-Two Interactive Software Inc. (TTWO); and InBev's acquisition of Anheuser-Busch.
Devlin has been charged criminally and in the SEC case. A cooperating witness that matches Devlin's description and faces similar charges has pleaded guilty to four counts of conspiracy to commit securities fraud and one count of securities fraud, according to court documents.
The SEC, which claims the scheme netted more than $4.8 million in illicit gains, alleged Devlin curried favor with friends and business associates by providing the inside information and received cash, a Cartier watch and other benefits as a result. Bouchareb also paid for Devlin to attend a Porsche driving school, the SEC said.
Devlin traded for his own account prior to the announcement of two deals, the SEC said.
To avoid detection, many of the defendants, who had accounts at Lehman, attempted to avoid detection by trading in accounts not associated with Lehman or Devlin, the SEC said.
Bouchareb and Corbin, at various points, referred to Devlin or his wife as the "golden goose," according to court documents.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
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Publié le 18 Décembre 2008 Copyright © 2008 Dowjones
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