World News

Broker who stole business secrets from wife avoids prison

NEW YORK (Reuters) - A former Lehman Brothers broker who stole corporate secrets from his executive wife and shared them with friends avoided a prison term on Friday, with the judge describing his crime as a “tragic and senseless” act for a gain of just $23,000.

Matthew Devlin, 38, pleaded guilty more than three years ago to insider trading and cooperated with authorities - sometimes wearing a recording device - to help convict four people and obtain civil judgments against two others.

U.S. District Judge William Pauley in New York sentenced Devlin to three years’ probation when he could have been imprisoned for almost four years.

“He betrayed the trust of everyone ... All of it completely tragic and senseless for a sum of money that to his benefit was a rounding error in his compensation,” Pauley said.

The case was not linked to the high-profile U.S. investigation of insider trading at the Galleon Group hedge fund, but it is one of dozens of insider trading prosecutions in New York in recent years.

Devlin’s case was made public in December 2008 with tawdry details about his betrayal of his wife, public relations executive Nina Devlin. By listening to her conversations and assessing the implications of her travel schedule, he illegally obtained corporate secrets without her knowledge.

Devlin received $23,000 in cash and gifts from friends for sharing stock tips with them, according to court documents. The deals included Novartis AG’s acquisition of Eon Labs in 2005, Electronic Arts Inc’s hostile bid in 2008 for Take-Two Interactive Software Inc and InBev’s acquisition of Anheuser-Busch.

Nina Devlin was an executive at Brunswick Group who worked with clients on mergers and acquisitions. She was not accused of any wrongdoing and is no longer working at the firm.

Devlin worked for Lehman for eight years, continued with Barclays after Lehman’s September 2008 collapse and he is now the primary care provider for the couple’s three year-old son. Lehman emerged from bankruptcy 2-1/2 weeks ago, but Devlin’s career in the financial industry was destroyed by his offences.

Four of his friends made millions trading on the inside information, the office of the Manhattan U.S. Attorney said. Prosecutor Reed Brodsky asked the judge to show leniency toward Devlin because he helped convict the four men.

Devlin’s lawyer, Mary Mulligan, asked the judge to sentence him to one year’s probation.

Devlin, in tears, told the judge at the sentencing proceeding that his conduct was “reckless, selfish and inexcusable” and that he had spent the last 3-1/2 years trying to repair the damage.

The four who pleaded guilty based on evidence provided by Devlin were Miami day traders Jamil Bouchareb and Daniel Corbin, former Lehman broker Frederick Bowers and Eric Holzer, a former tax lawyer at Paul, Hastings, Janofsky & Walker in New York.

The case is USA v Devlin, U.S. District Court for the Southern District of New York, No. 08-01307

Editing by Andre Grenon