You know the old saw about the lawyer who represents himself has a fool for a client, right? During the credit boom, the financial PR business grew at an astounding rate as deals–friendly and hostile–drove the news cycle. Brunswick, originally a UK firm, broke into the business by hiring the Wall Street Journal’s star M&A reporter Steve Lipin, the Andrew Ross Sorkin of his day. Since then, Brunswick has opened offices around the country–they just hired the Huffington Post’s Hillary Rosen in DC.
U.S. prosecutors in New York filed criminal insider-trading charges today against ex-Lehman salesmen Matthew Devlin and Frederick Bowers, lawyer Eric Holzer, and two day traders over illegal trades in a dozen transactions, including Mylan Inc.’s $1.2 billion stock buyback in 2005 and InBev NV’s acquisition of Anheuser-Busch Cos. in July. [ . . . ]
A criminal complaint says the spouse of the public relations executive is a cooperating witness who has pleaded guilty. The cooperating witness secretly recorded conversations with Bouchareb, according to one of several complaints. Court records don’t indicate that Matthew Devlin has pleaded guilty or whether a case against him has been sealed.
No one suggests that the Brunswick partner was involved in any way. Though Devlin’s buddies took to calling her the Golden Goose. Either way, it puts Brunswick in bad spot. The collapse of deal making can’t have been good for business. Now the firm’s confidentiality has been compromised. That’s a core competency.
So what would you do? Call your lawyer? He would suggest you bring in a PR firm. (D’oh.)
Here’s what Brunswick did:
The husband of a Brunswick employee has been arrested by US authorities for using information obtained illegally from her, and without her knowledge, which he has then passed to third parties. It is our understanding that the information, which relates to a limited number of her clients, was obtained by being in close proximity to his wife and from the implications of her travel schedule. There is no indication that he accessed Brunswick’s confidential systems. He has pleaded guilty to the charges and the Brunswick employee has not been charged or implicated in any way. We believe she was unaware of her husband’s activities and is devastated by these events.
As a firm, we have always been totally committed to protecting the confidentiality of our clients and as a result we have always implemented best-in-class systems and policies to ensure this happens. In this instance, this is a violation of trust between husband and wife. Our employee was the victim of a criminal act by her spouse which made detection extremely difficult despite our high standards of confidentiality.
Not bad. Press into the reporters and make sure they make it clear that your partner is the victim here. That part about “the implications of her travel schedule” is a nice touch too. It gives you that creepy sense of his spying on her and betraying them both in the process. The bad part about being the victim, though, is that you still suffer the punishment. Some folks at Madoff know what that feels like this week.
Update: Hmmm, Nina Devlin may have been a victim here but she wasn’t caught totally unawares. The Times is reporting that Brunswick got a warning in 2006:
The scheme nearly fell apart in April 2006, when Brunswick received a notice from Finra, the securities industry’s own watchdog. The notice showed Mr. Holzer on a “watch list” for trading. It appears Mrs. Devlin communicated that information to her husband. Nonetheless, the group continued to trade in various other deals like Electronic Arts’s bid for Take-Two Interactive.