U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21015 / April 28, 2009
Securities and Exchange Commission v. Matthew J. Browne, Civ. Action No. 4:09-CV -248-GKF-FHM (United States District Court for the Northern District of Oklahoma)
SEC Files Settled Insider Trading Charges Against Oklahoma Attorney
The Securities and Exchange Commission filed a civil action in the United States District Court for the Northern District of Oklahoma on April 28, 2009, alleging that Matthew J. Browne, a Tulsa, Oklahoma attorney, engaged in insider trading in securities of then Nasdaq-listed SemGroup Energy Partners, LP ("SGLP").
According to the Commission's complaint, on the morning of July 14, 2008, and in the course of providing legal services to a client, Browne learned that SGLP's privately-held parent company and largest customer, SemGroup, LP, was experiencing liquidity issues. The complaint further alleges that, immediately after learning this information, Browne sold his entire position in SGLP (5,200 units), at an average price of $24.06 per share. According to the complaint, by secretly trading on the non-public information, Browne breached duties of trust and confidence owed to his client and the law firm at which he was then employed.
On July 17, after the close of trading, SGLP announced that SemGroup, LP was "experiencing liquidity issues" and was considering bankruptcy. On July 18, SGLP's unit price closed at $8.30 per share, 65.5% lower than Browne's July 14 average sale price. According to the complaint, by liquidating his SGLP holdings on July 14, Browne avoided losses of $81,773.
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.
The staff's investigation is ongoing.