Authorities announced late this week that they had broken up and apprehended a criminal ring that worked with Morgan Stanley and Co. and UBS Securities LLC employees to obtain insider information. Over the last five years, this small group had accumulated millions in ill-gotten gains through hundreds of illegal tips and trades.

Also amongst those named was a Banc of America Securities LLC broker who supposedly accepted kickbacks from the group and two formers of Bear Stearns & Co. who apparently received inside info from UBS. A whole passel of charges have been filed and this is being called the largest insider trading scheme in many years (or at least since April).

The 14 Wall-Streeters pinched (so far) in the probe include:

• Mitchel Guttenberg, executive director at UBS.

• David Tavdy, proprietary trader at Andover Brokerage.

• Paul Risoli, broker at Banc of America.
  

• Erik R. Franklin, hedge fund manager at Bear Stearns.

• Randi Collotta, associate at Morgan Stanley's.

• Christopher Collotta, private practice attorney.

• Marc Jurman, representative at a Florida broker-dealer
  

• Ken Okada, Bear Stearns

• Robert Babcock, Bear Stearns

• Andrew Srebnik, Bear Stearns
  

• Mark Lenowitz, Chelsea Capital
  

• David Glass, Jasper Capital

• Laurence McKeever, Assent LLC

• Samuel Childs, Assent LLC
  

SEC Chairman Christopher Cox said of the case, "Our action today is one of several that will make very clear the SEC is targeting hedge-fund insider trading as a top priority." In other words...stay tuned...

For further details on the scheme and what sort of time these unlucky 14 are facing, check out the latest from Bloomberg.

-- MDT

Labels: Andrew Srebnik, Christopher Collotta, David Glass, David Tavdy, Erik Franklin, Ken Okada, Lawrence McKeever, Mark Jurman, Mark Lenowitz, Mitchel Guttenberg, Paul Risoli, Robert Babcock, Samuel Childs