SEC Charges Oklahoma-Based Attorney with Insider Trading

Washington, D.C., April 28, 2009 (LAWFUEL) – The Securities and Exchange Commission today charged Tulsa, Okla.-based attorney Matthew J. Browne with insider trading, alleging that he sold all of the stock he owned in a local energy company on the basis of confidential information that he learned while providing legal services to a client.

The SEC alleges that Browne avoided losses of more than $80,000 by selling all of his shares in SemGroup Energy Partners, LP (SGLP) on the same day he found out that its privately-held parent company and largest customer, SemGroup LP, was experiencing liquidity issues and defaulted on a $50 million margin call. The SGLP stock dropped nearly two-thirds in value by the end of that week after a public announcement was made by the company. Browne has agreed to pay more than twice the amount of his avoided losses to settle the SEC’s charges, without admitting or denying the allegations.

“By secretly trading on confidential information, Browne took advantage of his client, the law firm at which he was then employed, and the public at-large,” said Rose Romero, Director of the SEC’s Fort Worth Regional Office. “Attorneys should know better – the use of client information to profit from securities trading breaches their duties of trust and confidence.”

According to the SEC’s complaint, filed in the U.S. District Court for the Northern District of Oklahoma, Browne learned the non-public information on the morning of July 14, 2008, and immediately sold his entire position in SGLP (5,200 shares) at an average price of $24.06 per share. After the close of trading on July 17, 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 percent lower than Browne’s average sale price earlier that week. According to the SEC’s complaint, by liquidating his SGLP holdings on July 14, Browne avoided losses of $81,773.

In settling the SEC’s charges, Browne consented to pay disgorgement equal to the $81,773 loss he avoided by his illegal trading, plus prejudgment interest of $1,505.98 and a penalty of $81,773. Browne also agreed to a permanent injunction against future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Browne 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 SEC’s investigation is ongoing.

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