The SEC has charged 14 individuals—including employees of UBS and—with participating in two insider-trading schemes that generated at least $15 million in illegal profits.
The agency claims employees at the two major firms, along with others, traded nonpublic information in exchange for cash kickbacks.
Mitchel Guttenberg, executive director in the equity research department at, is accused of tipping off at least two Wall Street traders—using disposable cell phones and coded text messages—with information about upcoming UBS analyst upgrades and downgrades.
The traders, Erik Franklin and David Tavdy, are said to have illegally traded on the inside information in two hedge funds, broker/dealer accounts and in personal accounts. The SEC claims Guttenberg, Franklin and Tavdy made at least $14 million in profits from the “UBS scheme.”
The source of the Morgan Stanley insider trading is an internal attorney for the firm, according to the SEC. Randi Collotta, an attorney for global compliance department of Morgan Stanley, with the help of her attorney husband, allegedly provided nonpublic information about upcoming corporate acquisitions involving the firm’s-banking clients. The SEC claims Collotta tipped off Marc Jurman, a Florida-based rep, in exchange for the profits he would reap from trading on the information.
Jurman allegedly tipped off others, including two Bear Stearns reps, Ken Okada and Robert D. Babcock, who were also involved in the UBS scheme.
According to the SEC, Collotta, Jurman and their tippees made over $600,000 in illegal profits.
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