$ Insider trading charges against MS, UBS AG staff

The US Department of Justice has charged 14 persons in an insider trading case, reports CNBC-TV18. "Our action today is one of several that will make very clear the SEC is targeting hedge fund insider trading as a top priority," said SEC Chairman Christopher Cox in a release on the exchange commission's website.

According to Dow Jones Newswire, this is supposed to be one of the biggest insider trading cases since the 1980s. According to the 1998 speech prepared by the US SEC Staff, "Insider trading is a term subject to many definitions and connotations and it ncompasses both legal and prohibited activity. Insider trading takes place legally every day, when corporate insiders – officers, directors or employees – buy or sell stock in their own companies within the confines of company policy and the regulations governing this trading."

As per court documents, the charges include conspiracy, securities fraud, commercial bribery and making false statements. The SEC complaint alleges that eight Wall Street professionals, including a UBS research executive and a Morgan Stanley attorney, two broker-dealers and a day-trading firm participated in the scheme. The defendants also include three hedge funds, the biggest beneficiaries of the fraud.

"Today's events should send a message to anyone who believes that illegal insider trading is a quick and easy way to get rich. No matter how clever you are, no matter how hard you try to avoid detection, you underestimate us at your peril," said SEC Enforcement Director Linda Chatman Thomsen.

She further added, "Illegal insider trading undermines the level playing field that is the hallmark of our capital markets. It is, however, particularly pernicious when Wall Street insiders — who derive their already substantial livelihood from the capital markets and those markets' investors — shamelessly compromise the markets' integrity and investors' trust for a quick buck."
The accused include staff of Morgan Stanley, UBS and Bear Stearns. A former Morgan Stanley, or MS, compliance officer and her husband, an institutional client manager in the securities unit of the equity research department of UBS AG, former registered representatives in the securities businesses of Bear Stearns Cos (BSC) and Bank of America Corp, or BAC, and several hedge-fund employees.

The charges include conspiracy, securities fraud, commercial bribery and making false statements, according to court documents. The US government says it broke one of the biggest insider-trading cases since the 1980s. The US Regulators are suspicious of Wall Street's relationship wth Hedge Funds......