The U.S. Securities and Exchange Commission sued a Michigan man, claiming he traded on information he learned from a houseguest about the impending acquisition of Brink’s Home Security Holdings Inc.
The SEC, in a complaint filed yesterday in Manhattan federal court, claimed that Robert Doyle, 64, made $88,555 in profits trading in Brink’s Home Security stock after an investment banker for Tyco International Inc., the buyer, inadvertently left behind a draft presentation on the deal.
According to the complaint, the unnamed Tyco banker visited Doyle’s Michigan home from Aug. 23 to Aug. 27, 2009. While there, the banker worked on a presentation to Tyco’s management about a proposal to buy Brink’s Home Security, an installer of security alarms operating as Broadview Security. Months later, in December 2009, Doyle discovered the draft, according to the SEC.
“On Jan. 13, 2010, during phone conversations with the banker, Doyle gleaned from changes in the banker’s travel schedule that the transaction was imminent,” according to the complaint.
Doyle profited from trading in Brink’s Home Security stock after the Jan. 18, 2010, public announcement of the deal caused its price to jump 30 percent, according to the SEC.
Henry Putzel, Doyle’s lawyer, said his client has settled the case and will turn over his profits and pay a fine. Putzel declined to name the banker or identify the banker’s relationship to Doyle.
Citigroup Inc. was the financial adviser to Tyco on the deal.
Brink’s Home Security was spun off from Brink’s Co. in 2008. Tyco closed the acquisition May 14, 2010, paying $2 billion in cash and stock. Tyco, based in Schaffhausen, Switzerland, combined the Brink’s Home Security business into its ADT unit.
The case is U.S. v. Doyle, 11-CV-4964, U.S. District Court, Southern District of New York (Manhattan).