Ex-Morgan Stanley worker pleads guilty

Wed Jul 9, 2008 5:46pm EDT

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NEW YORK (Reuters) - A former Morgan Stanley (MS.N) employee pleaded guilty in Federal court on Wednesday to charges related to possessing stolen proprietary information about the brokerage firm's hedge fund clients

Ronald Peteka, 43, a former Morgan Stanley client service representative, said he received the information via e-mail from another person and sent it to his Long Island home. The maximum penalty under the charges is 10 years imprisonment and a fine of as much as $250,000.

"I made a very huge mistake," said Peteka in his appearance at the U.S. District Court in Manhattan.

Peteka obtained documents, including a list of Morgan Stanley's prime brokerage hedge fund clients and the formulas used to calculate rates paid by the clients to the firm for some services, according to prosecutors.

Ira Chilowitz, a former Morgan Stanley computer consultant, pleaded guilty in 2007 to stealing names of the firm's hedge fund clients and confidential information about the fees they were charged.

Chilowitz said he planned to use the information to help generate business for a consulting firm with Peteka.

(Reporting by Chelsea Emery; Editing by Andre Grenon)