Insider Information Barter: Not Smart

Most insider trading cases make the perps look ridiculously stupid. But this one really goes above and beyond.

Federal prosecutors charged five men with participating in an illegal insider trading scheme based on information received from the wife of one of the accused. Matthew Devlin, a former Lehman broker, allegedly picked up tips about mergers and stock buybacks from his wife, who works for the public relations firm Brunswick Group.

Instead of trading on the information himself, though, the Feds accused this genius of passing the tips on to two day traders, a lawyer friend, and another Lehman broker. In exchange, they supposedly showered Devlin with gifts, including a Cartier watch, a wide-screen television, a gift card to luxury retailer Barneys New York, and lessons at a Porsche driving school, according to a civil filing by the S.E.C.

The recipients allegedly made millions on the trades for more than four years, while eagerly pushing Devlin for more information and referring to his wife as the "goose." "We need the goose to pop its head out and show us the biz," one of the traders wrote in an email. "Where has my goose gone? Come back little goose."

Unlike in other insider trading cases, this one has a clear victim: Matthew Devlin's wife, Nina. It appears she had no idea her husband was taking information she shared over dinner conversations to a ring of insider traders. She has not been charged civilly or criminally and prosecutors contend she was in the dark.

The good news for her is that Devlin has pleaded guilty and has cooperated with authorities. So she may not be forced to eat dinner alone while her husband sits behind bars. But she may decide she wants to after all.

by Megan Barnett