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Ex-Broker Bowers Pleads Guilty To Fraud In Insider Trading Case
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(May 14, 2009 - Thursday) - http://online.wsj.com/article/BT-CO-20090514-717568.html
By Chad Bray
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A former Lehman Brothers Holdings Inc. broker pleaded guilty to criminal charges in an alleged insider-trading scheme in which a co-worker shared information about pending mergers and other deals gleaned from the co-worker's wife, who worked at communications firm Brunswick Group LLC.
Frederick E. Bowers pleaded guilty to conspiracy and securities fraud at a hearing before U.S. District Judge George Daniels in Manhattan on Thursday.
Marc Agnifilo, a lawyer for Bowers, said his client didn't trade on the information from his then-co-worker, Matthew Devlin, but passed it on to a client, who did trade on it. He received a few thousand dollars from the client a few months later, Agnifilo said.
"On balance, he really did play a far lesser role than other players in the insider trading," Agnifilo said.
Bowers faces 12 months to 18 months in prison under federal sentencing guidelines. He also agreed to forfeit $12,000 - the money he received. Sentencing is set for Aug. 20.
Bowers is the fourth person to plead guilty in the case.
Devlin, Bowers' former co-worker, pleaded guilty in December to four counts of conspiracy and one count of securities fraud. He is cooperating with the government.
Prosecutors had alleged Devlin improperly shared information obtained from his wife, Nina Devlin, about mergers, hostile takeover bids and a share buyback, telling others before the deals were announced publicly. The wife hasn't been accused of wrongdoing.
Nina Devlin's lawyer has said she was "completely unaware that confidential information about her job was being used as the basis for securities trading."
Last week, Eric A. Holzer, a tax lawyer, and Jamil A. Bouchareb, a Florida day trader, separately pleaded guilty to conspiracy and securities fraud in the matter.
Criminal charges are pending against Daniel Corbin, another day trader. He has denied wrongdoing.
The men also are facing separate civil charges brought by the U.S. Securities and Exchange Commission.
According to the SEC, Bowers, Holzer and Bouchareb were among a group of clients and friends allegedly tipped by Devlin about 13 planned deals before their public announcements between 2004 and 2008.
The deals included Novartis AG's (NVS) acquisition of Eon Labs in 2005, Electronic Arts Inc.'s (ERTS) hostile bid last year for Take-Two Interactive Software Inc. (TTWO) and InBev's (ABI.BT) acquisition of Anheuser-Busch.
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.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
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