NEW YORK: Dow Chemical Company has suspended its relationship with Brunswick Group following insider trading charges that were filed against the husband of a partner at the communications firm.
“We are shocked and disappointed by the recent events,” said a company statement given to PRWeek by David Winder, corporate media relations at Dow. “We have strict confidentiality agreements in place with all of our suppliers and agencies.”
In the e-mailed statement, it said that Dow has “taken the prudent action of temporarily suspending all business relationships with Brunswick Group, pending the outcome of the investigation by the Department of Justice and the Securities and Exchange Commission.”
Steve Lipin, senior partner at Brunswick Group, declined to comment to PRWeek about Dow or any other client relationships in this case.
The statement continued: "Dow also has an existing relationship with FD, another financial communications firm, and we will continue to work with them on efforts that are already in place."
Matthew Devlin, a former Lehman Brothers employee, was charged by the Securities and Exchange Commission (SEC) with insider trading. The allegations are that Devlin obtained the information from his wife, Nina Devlin, a partner at Brunswick, although neither Nina nor Brunswick are charged. Nina Devlin's lawyer has insisted his client's husband obtained the information without her knowledge.
The SEC complaint alleges that Devlin "traded on and tipped at least four of his clients and friends with inside information about 13 impending corporate transactions." In an additional suit filed by the US Attorney's Office for the Southern District of New York, the Dow acquisition of Rohm Haas this summer is listed as one of the transactions that Brunswick worked on which Devlin allegedly obtained information on.
Additional deals worked on by Brunswick, which he allegedly "obtained material nonpublic information" on include the InBev acquisition of Anheuser-Busch earlier this year, the failed Electronic Arts hostile takeover of Take Two, and nine other deals.