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Wednesday, April 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

Inside Trading Netted $870K, Feds Say

MANHATTAN (CN) - Federal prosecutors say a UBS Securities investment banker tipped a securities trader to inside information on six mergers, and the crony made $870,000 and kicked back $28,000 of it. Igor Poteroba, an executive director of UBS' Healthcare Group, tipped Alexei Koval to the inside dope, according to the complaint. The SEC also sued Poteroba and Koval, and Alexander Vorobiev, whom Koval allegedly tipped to the inside information after hearing about it from Poteroba.

"Poteroba, Koval, and Vorobiev have connections through, among other things, the schools that they attended and residences or mailing addresses that they shared going back to at least 1992," according to the SEC complaint.

The SEC claims the men used codes to swap information "that referred to securities as 'frequent flier miles' and 'bonus miles,'" or "coded email messages that referred to securities or money as Macy's wedding registry gifts or 'potatoes.' For example, in discussing the need to purchase Molecular Devices Corporation securities prior to the imminent public announcement of its merger, Poteroba wrote to Koval, 'Let me know if you've started your wedding registry at Macy's' and 'Happy to talk about sales items and etc. ... sale ends soon ... so hurry up.'"

Poteroba, 36, of Darien, Conn., is a permanent U.S. resident who was born in Moscow, Russia.

Koval, 36, formerly of Pasadena, Calif., and now of Chicago, also is a permanent U.S. resident; he was born in Komerovo, Russia.

Vorobiev, 34, formerly of Toronto, has gone back to Russia, the SEC says.

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