U.S. charges 13 in insider trading, bribery cases
NEW YORK (Reuters) - The U.S. government on Thursday charged 13 people, including employees at major Wall Street banks, with securities fraud, wire fraud, bribery and other charges in what authorities are calling one of the most pervasive insider trading rings in years.
Michael Garcia, U.S. Attorney for the Southern District of New York, said the insider trading schemes involved a UBS Securities executive who is accused of selling information about upcoming analyst upgrades and downgrades, and a former Morgan Stanley attorney accused of giving out information about mergers and acquisitions.
Prosecutors said that two brokers at Assent LLC found out about the scheme involving the UBS executive and blackmailed some of the people involved.
In addition, prosecutors charged that a Banc of America Securities representative allocated shares of initial public offerings and secondary offerings to a hedge fund, Q Capital, for cash kickbacks.
Prosecutors said that all 13 people had been arrested and four had pleaded guilty.
Also on Thursday, the U.S. Securities and Exchange Commission charged 11 people and three companies in a civil suit related to the insider trading schemes.
It was "one of the most pervasive Wall Street insider trading rings since the days of Ivan Boesky and Dennis Levine," said Linda Thomsen, director of enforcement with the SEC, at a joint news conference with the U.S. Attorney and the FBI on Thursday. She was referring to major insider trading scandals of the 1980s.
The SEC said those involved in the schemes used clandestine meetings, disposable cell phones, secret codes and cash kickbacks to conceal their conduct, making profits of up to $15 million over five years.
