ISE ex-vice chair gets 18 months in conspiracy

LOS ANGELES, Dec 15 (Reuters) - A former vice chairman of the International Securities Exchange was sentenced on Monday to 18 months in prison for his role in an alleged conspiracy to leak confidential information about the $2.8 billion takeover of the options and stock exchange in 2007.

U.S. District Judge Laura Taylor Swain also ordered John Marshall to serve 12 months of home confinement as part of a three-year term of supervised release. Marshall also agreed to forfeit $1.1 million in profits he and two business partners realized from the alleged scheme.

Marshall, 55, pleaded guilty in September to one count of conspiracy to commit securities fraud in federal court in Manhattan.

Prosecutors accused him of using his position at the exchange to obtain nonpublic information about the pending ISE deal and giving it to his business partners at financial consulting firm, Marshall Tucker & Associates LLC.

Marshall admitted when he entered his guilty plea that he passed “hints” about the merger to partner Alan Tucker, knowing that he “would likely trade on that information.”

Marshall, Tucker and partner Mark Larson were sued by the U.S. Securities and Exchange Commission in March and charged criminally. Tucker pleaded guilty to one count of conspiracy to commit securities fraud in September.

Marshall resigned from his position at the exchange when he was charged in March.

ISE was bought by Eurex Frankfurt, a derivatives exchange owned by Deutsche Boerse AG DB1Gn.DE and the SWX Swiss Stock Exchange. The all-cash deal was announced in April 2007 and closed in December. (Reporting by Gina Keating)