By Yinka Adegoke

WALL Street's top public-relations (PR) firms have long supplied grist to a mill hungry for tips about financial deals, but revelations in an insider-trading case could lead to that stream of information slowing down.

The United States authorities have accused former Lehman Brothers salesman Matthew Devlin of tipping friends and relatives about 13 impending mergers with confidential information he got from his wife Nina, a partner at Brunswick Group, which is an international financial- communications firm.

While Mrs Nina Devlin was not charged in the case, and Brunswick has said the information was given without her knowledge, the breach of client trust is immense, PR experts said.

Brunswick said on Monday that it had suspended Mrs Devlin pending the outcome of an internal review by outside counsel.

Experts said the case shows the danger of "pillow talk" between PR professionals and their spouses, or gossip with friends.

The Devlin case involved some of the biggest deals in the last four years, including Alcoa Inc's US$27- billion (S$38-billion) hostile offer for Alcan last year and Dow Chemical's US$15-billion acquisition of Rohm & Haas this year.

There will likely be a crackdown on such sensitive news at PR firms, not only on who has access to information, but also where and when they have access to it.

Most firms Reuters spoke to said that they are taking a second look at their policies on handling information, and are considering tighter restrictions on taking documents home and access to computer systems. Most had already sent out policy reminders to their staff and are consulting their lawyers.

That could send a chill through a niche but lucrative business that operates in the shadows of almost every major merger deal.

PR firms that specialise in mergers and acquisitions develop a communications strategy between the client companies, their lawyers and investment bankers, as they try to sell a deal to the media, investors and other key groups, such as employees, customers and suppliers.

The role gives them access to a well of extremely-sensitive financial information, so trust is a crucial ingredient of the relationship.

Occasionally, some of the information PR firms are privy to is leaked to a media outlet of choice as part of the public-relations strategy agreed with clients. Other times, news goes out broadly in a press release.

Tough new curbs on who has access to critical information could reduce the number of background briefings given to journalists covering deals.

Some PR experts said such briefings are questionable.

"I would advise the PR firm not to go on background too often because they're apt to reveal 'insider guidance'," said Mr Howard Rubenstein, founder of the 54-year-old firm Rubenstein.

Meanwhile, Brunswick will be working hard to assure clients that it can still be trusted, said industry watchers.

A PR partner who asked not to be named said: "It's a black eye for Brunswick.

"They're in damage-control mode; it must be a huge blow to them."