FACTBOX-Inside the alleged insider trading
March 1 - (Reuters) - Following are three examples of insider trading alleged by federal prosecutors as part of a wider investigation announced on Thursday that involved employees at major Wall Street firms and resulted in charges against 13 people. For a full story, click on [ID:nN01369197]. For a list of U.S. traders, lawyers accused in trading scheme, click on [ID:nN01289602].
UBS UPGRADE EXAMPLE
June 15, 2006 - UBS (UBSN.VX) research executive Mitchel Guttenberg tips Florida-based trader David Tavdy that UBS is about to raise its rating on PepsiCo Inc. (PEP.N).
June 15, 2006 - Tavdy buys 17,000 shares of PepsiCo stock in a brokerage account.
June 16, 2006 - UBS publicly announces the upgrade of PepsiCo to "buy" from "neutral."
June 16, 2006 - Tavdy sells 17,000 shares of PepsiCo from the same brokerage account.
Profit: $10,000
UBS DOWNGRADE EXAMPLE
March 28, 2006 - Guttenberg tips Tavdy that UBS is about to cut its rating on Caterpillar Inc. (CAT.N).
March 28, 2006 - Tavdy sells short 11,000 Caterpillar shares in a brokerage account.
March 29, 2006 - UBS publicly announces the downgrade of Caterpillar to "neutral" from "buy."
March 29, 2006 - Tavdy purchases 11,000 Caterpillar shares in the same brokerage account.
Profit: $30,000
MORGAN STANLEY EXAMPLE
Before June 30, 2005 - Morgan Stanley lawyer Randi Collotta and her husband Christopher Collotta tip Florida-based broker Marc Jurman, who tips Bear Stearns BSC.N registered representative Robert Babcock about the impending UnitedHealth Group (UNH.N) deal to buy PacifiCare Health systems.
June 30 and July 1, 2005 - Babcock purchases 79 call options in PacifiCare.
July 6, 2005 - UnitedHealth announces an agreement to buy PacifiCare for about $8 billion in cash and stock.
July 6, 2005 - Babcock sells 79 call options.
Profit: $50,000
SOURCE: U.S. Attorney for the Southern District of New York.
