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November 3, 2008

Insider trading leads to former UBS executive being inside prison for 78 months

As detailed in this Reuters story, a former UBS executive is going to have to deal with a whole different kind of insider trading for more than six years in federal prison:

A U.S. judge sentenced a former UBS AG executive to 6-1/2 years in prison on Monday for his role in what prosecutors called the most pervasive insider trading ring since the 1980s. Mitchel Guttenberg, a former institutional client manager in UBS' equity research department, admitted in a guilty plea in February to selling nonpublic information about the bank's stock recommendations.

In handing down the sentence, which includes three years of supervision after his release, Judge Deborah Batts of U.S. District Court in Manhattan said, "from the moment he joined the (UBS) investment review committee he planned to give that information to others to use illegally."

Batts did not fine Guttenberg, who expressed his remorse to his family, the court and his former employer. His lawyer Sean O'Shea described Guttenberg as "a broken man" whose wife had left him, and he was living in his sister's apartment.

Guttenberg was among 13 people, including former employees of Wall Street firms such as Bank of America Corp, Morgan Stanley and Bear Stearns Co Inc, who were criminally charged last year in an insider trading ring....

Guttenberg had pleaded guilty to two counts of conspiracy and four counts of securities fraud. He had faced 78 months to 97 months in prison under sentencing guidelines.

Ah... remember the '80s?  Perhaps the decade is making a comeback...

November 3, 2008 at 04:46 PM | Permalink


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I am surprised she did not fine him. The article doesn't say if he actually profited off of the information or whether it was just his clients. It makes it confusing. If he didn't profit, this seems like a harsh sentence. If he did profit, why didn't she fine him. I'm sure it all makes sense but the news article doesn't help.

Posted by: Daniel | Nov 3, 2008 9:32:30 PM

Can anyone clarify what are the charges of trading account of a government bank?

Posted by: manas petroleum | Jun 25, 2009 7:32:00 AM

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