In December 2008, the SEC sued Matthew Devlin, a former Lehman Bros. broker, for trading on and tipping his clients and friends with confidential, nonpublic information about 13 impending corporate transactions that allegedly led to $4.8 million in illegal profits. The agency also brought cases against eight other defendants. All of the cases flowed from Devlin obtaining inside information from his wife, a partner in the New York City office of an international public relations firm that was working on the deals. Devlin's wife reportedly had no idea that her husband was doing any of this.

Federal prosecutors also became involved and brought criminal cases. Late last week, these criminal cases wrapped up as U.S. District Judge William Pauley sentenced Devlin to three years of probation. Notably, multiple defendants in the case who learned of the inside information from Devlin received prison sentences but Devlin did not because of his “noteworthy” assistance. Bloomberg reports that after being approached by the FBI three and a half years ago, Devlin immediately agreed to cooperate, making recordings of co-conspirators and helping the government gather evidence against four others involved in the insider-trading scheme.

In sentencing Devlin to probation, Judge Pauley described the entire scheme as tragic and senseless. ‘‘It should torment you,'' the judge told Devlin, ‘‘but you have to remember you brought it all upon yourself for no reason that I can discern.''

Judge Pauley also may be the first judge to describe insider trading as a betrayal of one's country. The judge stated that Devlin knew the insider trading he and his co-conspirators were engaged in would "undermine the integrity of the financial markets which our nation relies on ... so, he betrayed his country as well.”