Trader Daniel Corbin Pleads Guilty

Day trader Daniel Corbin pleaded guilty in federal court in New York today to charges that he conspired to make illegal trades based on confidential tips gleaned from the wife of a former Lehman Brothers salesman.

Corbin, 35, of Miami Beach, Florida, pleaded guilty to one count each of securities fraud and conspiracy before U.S. Magistrate Judge Henry Pitman in federal court in Manhattan, making him the last of five people indicted in December 2008 to plead guilty.

Corbin said that his partner, Jamil Bouchareb, obtained material non-public information about Veritas DGC Inc. that was used to buy 2,500 shares of the company for their joint account on Sept. 1, 2006. The trade earned them $16,000 in profits. Compagnie Generale de Geophysique SA said four days later it had agreed to buy the provider of geophysical services to the oil industry for $3.1 billion.

Corbin told Pitman in court today that he had “suspicions” that the information that Bouchareb had obtained wasn’t public. Bouchareb got his tips from a former Lehman Brothers Holdings Inc. salesman, Matthew Devlin, and told Corbin about them prior to the trade being made, said Corbin’s attorney, Ronald Gainor.

“I consciously avoided looking into the situation further and I turned a blind eye to it,” Corbin said.

Confidential Tips

Corbin and four other people were indicted in December 2008 and accused of making illegal trades based on confidential tips gleaned from Devlin’s wife, a Brunswick Group public-relations executive who was involved with corporate deals. She wasn’t accused of wrongdoing. Devlin admitted to his role in the scheme in December 2008 and agreed to cooperate with prosecutors, according to a court document. He hasn’t been sentenced.

The three other people named in the indictment pleaded guilty in May 2009: Bouchareb; former Lehman salesman Frederick Bowers; and Eric Holzer, a tax lawyer who worked at Paul Hastings Janofsky & Walker LLP. Bowers and Holzer were both sentenced to probation, and Bouchareb is scheduled to be sentenced in July.

Under an agreement with prosecutors, Corbin faces six to 12 months in prison when he is sentenced before U.S. District Judge Victor Marrero. A date hasn’t been set. He remains free on a $500,000 personal recognizance bond.

The case is U.S. v. Corbin, 09-cr-00463, U.S. District Judge, Southern District of New York (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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