The patron saint of wannabes everywhere
We thought Insider’s Tip #2 was clear enough: don’t trade on your own deals. Apparently not.
We all enjoyed laughing at the ineptitude of sandwich thief Troy Ellis – the lawyer who was censured by the Supreme Court of Kansas after being caught repeatedly stealing lunch from his company’s cafeteria.
As we previously reported, he eventually ended up as a “Business Development Leader” at SemGroup, an oil and gas pumping and trucking business with a whole host of problems. The company filed for bankruptcy last July.
Turns out SemGroup’s other lawyers aren’t so smart either.
The rest of the story, and Tip #3, after the jump.
This time it was outside counsel, though. According to ABA Journal,
Matthew J. Browne, a 56-year-old oil and gas lawyer, was accused of selling his stock in SemGroup Energy after he learned the company defaulted on a $50 million margin call to a law firm banking client, the Tulsa World reports.
At least he was only dumping stock ahead of bad news, a la Martha Stewart. The story would have been really funny if he had leveraged up and shorted his client.
He got off relatively lightly, though.
Without admitting or denying the allegations in the complaint, Browne has consented to a permanent injunction against future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and to pay disgorgement of the $81,773 loss he avoided by his illegal trading, plus prejudgment interest of $1,505.98, and a civil penalty of $81,773. In a separate administrative action, Browne has also consented to a five-year suspension from appearing or practicing before the Commission, under Rule 102(e) of the Commission’s Rules of Practice.
So far, anyway. Presumably the Oklahoma bar won’t look kindly on this.
When we first posted Insider’s Tip #1 for Wannabe Insider Traders, we thought we were providing some information that not everyone knew:
Whenever there is “suspicious activity” in a security, the SEC pulls together lists of all of the trades, including the traders’ names and hometowns. The list gets sent to the law firms, investment banks, and accountants working on the deal. The members of the deal teams are expected to go through and certify that they don’t know anyone on the list.
But subsequent events led us to realize that we would have to start with baby steps. Apparently, even Tip #2 was too complicated.
We’re embarrassed we have to spell out Tip #3: don’t trade in your clients’ stock. It’s not even like you can claim privilege.
Israel Grossman’s title as the best (or worst, depending on how you look at it) lawyer cum insider-trader remains unchallenged. At least he stole big ($2.5 million) and was unrepentant.
Bumbling, heavyhanded incompetence like Browne’s just makes us sad.
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What was tip #2?
We thought Insider’s Tip #2 was clear enough: don’t trade on your own deals. (First line of the article) It's here: http://lawshucks.com/2009/01/16/insiders-tip-2-fo...
This is also known as the "don't get high on your own supply" rule.
What was tip #2?
We thought Insider’s Tip #2 was clear enough: don’t trade on your own deals. (First line of the article) It's here: http://lawshucks.com/2009/01/16/insiders-tip-2-fo...
This is also known as the "don't get high on your own supply" rule.
Love the chunky phone! Part of what makes that movie a true classic.
Love the chunky phone! Part of what makes that movie a true classic.
sorry I meant what was tip #1 – but love your high/supply analogy.
sorry I meant what was tip #1 – but love your high/supply analogy.