The NY Times has an article about a new scandal involving Morgan Stanley, UBS and some hedge funds.
http://www.nytimes.com/2007/03/02/business/02inside.1.html ---------------------------------------snip Officials said the case involved two different schemes that were linked through one hedge fund trader. Federal authorities say that starting in 2001, Mitchel S. Guttenberg, a 41-year old executive director in the stock research department of UBS, tipped a friend, Erik R. Franklin, about upcoming upgrades and downgrades of stocks, which was information that would move the price of the stocks. Mr. Franklin, at different times during the five-year scheme, worked for a hedge fund at Bear Stearns called Lyford Cay Capital, Chelsey Capital, a hedge fund, and Q Capital Investment Partners, as well as trading for his own personal account and that of his father-in-law. The friends used disposable cellphones and secret codes to try and cover up their activities, the S.E.C. complaint says. The ties went further than the two friends: each had his own network of tippees and the case was so complex that the United States attorney in Manhattan, Michael J. Garcia, used a large posterboard to explain the inner workings. For example, Mr. Guttenberg, also passed the tips to David M. Tavdy, 38, a proprietary trader at Andover Brokerage and Jasper Capital, according to investigators. Mr. Franklin, a hedge fund trader, tipped Mark E. Lenowitz, 43, who worked for Chelsey Capital, a hedge fund and was a limited partner at Q Capital Fund. In a separate scheme, Randi Collotta, a 30-year-old lawyer in the global compliance department at Morgan Stanley, is accused of doling out information about upcoming mergers and acquisitions in return for a share of illegal profits. She worked with her husband, a lawyer in private practice, and they tipped off Marc Jurman, a broker in Florida who shared his profits with the Collottas, according to investigators. Mr. Jurman in turn passed the information to Robert D. Babcock and Ken Okada, employees at Bear Stearns.
