PREET BHARARA, the United States Attorney for the Southern District of New York, announced that ALEXEI P. KOVAL, a/k/a “Aleksey Koval,” was sentenced today in Manhattan federal court to 26 months in prison for his participation in an insider trading scheme. KOVAL, a registered investment adviser, traded on inside information he received from his co-conspirator, IGOR POTEROBA, a former investment banker in the Healthcare Group of UBS Securities LLC (“UBS”). The trading, which was based on information related to six mergers and acquisitions that certain UBS clients were contemplating, generated hundreds of thousands of dollars in illicit profits. KOVAL, 37, previously pled guilty to three counts of securities fraud and one count of conspiracy to commit securities fraud on January 7, 2011. U.S. District Judge PAUL A. CROTTY imposed today’s sentence.
Manhattan U.S. Attorney PREET BHARARA said: “Alexei Koval flagrantly and repeatedly traded on inside information and was only too happy to share his illicit profits with his partner in crime and tipster. Their scheme has now come to a just conclusion.”
According to documents previously filed in Manhattan federal court:
From May 2006 through at least 2009, KOVAL was a registered investment adviser. During approximately the same time period, POTEROBA served as an executive director at UBS. In that capacity, he obtained material, non-public information (the “UBS Inside Information”) regarding certain mergers and acquisitions involving the following six publicly traded health care companies: Guilford Pharmaceuticals, Inc., Molecular Devices Corporations, PharmaNet Development Group, Inc., Via Cell, Inc., Millennium Pharmaceuticals, Inc., and Indevus Pharmaceuticals, Inc. (collectively, the “Health Care Companies”). In violation of his duties of trust and confidence, POTEROBA then disclosed the UBS Inside Information to KOVAL, who traded on the information, and disclosed it to another co-conspirator (“CC-1”).
As part of the scheme, KOVAL typically received tips from POTEROBA by telephone in advance of a public announcement about certain mergers and acquisitions. Shortly after receiving a tip from POTEROBA, he and CC-1 purchased securities in one of the Health Care Companies. Following the public announcement of the acquisition, KOVAL and CC-1 quickly sold the securities they had purchased. They executed dozens of securities transactions based on UBS Inside Information provided by POTEROBA. KOVAL then paid a portion of the profits to POTEROBA.
In addition to his prison term, Judge CROTTY sentenced KOVAL, of Chicago, Illinois, and Pasadena, California, to two years of supervised release and ordered him to forfeit $1,414,290, representing the amount of proceeds obtained as a result of the securities fraud offenses charged in the Indictment.
KOVAL’s co-conspirator IGOR POTEROBA, 37, of Darien, Connecticut, pled guilty to similar charges before Judge CROTTY on December 21, 2010, and was sentenced to 22 months’ imprisonment on March 21, 2011.
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission for its assistance in the investigation.
Thursday, May 26, 2011
Alexei P. Koval Sentenced in Manhattan Federal Court to 26 Months in Prison for Insider Trading Scheme
************************************************************************
Report Securities Fraud by Calling 1-888-482-6825 or by visiting
www.reportsecuritiesfraud.net
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment