By Ashli Sims, The News On 6
TULSA, OK -- The Securities and Exchange Commission is going after a Tulsa attorney for insider trading in connection with the downfall of Tulsa's SemGroup.
When SemGroup went down it took hundreds of millions of investor dollars with it. But, the SEC says one attorney used insider knowledge to make money, while others were losing it.
SemGroup went public in the summer of 2007 with SemGroup Energy Partners or SGLP. When SGLP hit the Nasdaq, the price of shares jumped $7 in just one day. A year later, news broke that SemGroup was in trouble and it took just one day for SGLP shares to lose half their value.
Now the Tulsa based energy company is navigating bankruptcy and fending off lawsuits from investors, who claim they were duped. One lawsuit estimates SemGroup Energy Partners investors lost about $300 million.
The Securities and Exchange Commission says Tulsa lawyer Matthew Browne wasn't one of them. They say Browne was a banking and oil and gas attorney whose client roster included a bank that loaned money to SemGroup.
The SEC says shortly after Browne arrived at his Tulsa law firm on July 14th, 2008, he got a call from his boss. According to the SEC complaint, Browne's boss told him their client, a bank, was having problems with SemGroup.
Investigators say Browne and his boss spoke to a bank vice president through a conference call and they discussed a margin call for $50 million and the balance of SemGroups accounts.
The SEC says about half an hour later, Browne told his brokers to sell.
Over the next two hours, three brokerage firms unloaded Browne's 5,200 units of SGLP.
By the close of business that day, his entire SGLP holdings were sold at an average price of $24 a share, totaling more than $125,000.
Three days later, on July 17th, after the close of trading, SemGroup told the rest of the world it's having cash flow problems.
On July 18th, SGLP closed at $8.30. By selling on July 14th, the SEC says Browne ducked about $80,000 in losses.
The SEC reports Browne's law firm terminated him last October. He now has to pay back the money he would have lost on SemGroup, plus another $80,000 in fines.
Matthew Browne was fired over the incident and he can't practice before the SEC for five years.
In other SemGroup news, SemGroup cofounder Tom Kivisto called Louis Freeh's report on the demise of his company full of errors.
Reuters reported on Tuesday that Louis Freeh is firing back saying Kivisto's attorney didn't address the central findings of his report. And, he told Reuters he wanted Kivisto's testimony under oath, but he and his attorney refused.