Paul Hastings Associate Accused in $4.8M Insider Trading Scheme
A Paul Hastings tax associate was one of four people charged Thursday with insider trading based on information provided by the husband of a public relations representative who had information on pending deals.
Lawyer Eric Holzer, 34, is accused of buying stock based on information provided by former Lehman Brothers broker Matthew Devlin, whose wife Nina is a partner at the public relations firm Brunswick Group, the New York Law Journal reports.
Holzer is accused of making $175,000 in his own trading accounts and two accounts controlled by his father, according a press release.
Prosecutors claim those tipped off by Matthew Devlin repaid him with cash kickbacks, a Cartier watch, a Barneys New York gift card, a widescreen TV, a Ralph Lauren leather jacket and a lesson at a Porsche driving school, according to the New York Times.
Devlin, who called his wife the “golden goose,” has already pleaded guilty to running the $4.8 million scheme and is cooperating with prosecutors, the story says. Nina Devlin was not charged and is said to be “devastated” by the news.
Matthew Devlin primarily learned of the confidential information by being close to his wife when she was working at home on confidential deals and by knowing her schedule, a person close to the case told the Wall Street Journal (sub. req.). The criminal complaint says Matthew Devlin told several of those involved in the scheme that his wife would divorce him if she learned of his conduct, the New York Times says.
Two day traders and another stock broker were also charged in the case. The Securities and Exchange Commission has filed a separate civil complaint against seven people, and is seeking trading profits obtained by two other so-called “relief defendants,” who are not charged. The relief defendants are a Playboy playmate accused of receiving information from one of the day traders, and another lawyer, Lee H. Corbin, 66, of Kurzman Eisenberg Corbin & Lever, the father of the other day trader, the Times story says.
Holzer is mentioned in five press releases on the Paul Hastings website as working on teams involved in mergers and acquisitions. He is not listed among the firm’s lawyers.
A statement by the firm released Thursday to the New York Law Journal reads: “We learned today of allegations against an associate of the firm, which have no connection to any firm or client matters. We will cooperate fully with the authorities in any investigation.”
The Wall Street Journal Law Blog posted the civil complaint (PDF).
