Florida broker tipped friend for cash and jet ski dock -U.S.
WASHINGTON Jan 25 (Reuters) - A former Morgan Stanley financial adviser was arrested on Friday on charges of illegally tipping a friend to an $11 billion pharmaceutical deal in exchange for $35,000 and a jet ski dock, federal officials said.
The adviser, Kevin Dowd, 37, was a registered representative in the Aventura, Florida, branch office of a brokerage firm between 2005 and 2012, said the U.S. Attorney's office in New Jersey, which brought the criminal case.
U.S. prosecutors and market regulators said Dowd leaked details in 2011 about a pending deal by Gilead Sciences to acquire New Jersey-based Pharmasset Inc. Dowd was tipped off by a member of Pharmasset's board, who was the Aventura branch's biggest customer, prosecutors said.
A lawyer for Dowd was not immediately available for comment.
Dowd was charged with conspiracy to commit securities fraud and is scheduled to appear in federal court in Florida later on Friday. The Securities and Exchange Commission regulator filed civil charges.
Broker records indicate Dowd worked for Citigroup and Morgan Stanley, which co-own the Smith Barney brokerage firm.
A representative of the unit, now known as Morgan Stanley Wealth Management, said the unit has cooperated in the inquiry.
"Mr. Dowd was in clear violation of company policy and was terminated on December 12, 2012 for behavior that the firm does not tolerate," it said in a statement.
On Nov. 18, 2011, before the Pharmasset deal was publicly announced, Dowd tipped a childhood friend who bought $196,000 in Pharmasset stock, and made $163,000 on the tip, officials said. The friend gave Dowd a wooden dock for his jet skis and a check for $35,000. He used the money for an in-ground pool at his Boca Raton home, prosecutors said.