Image: Randi Collotta
Richard Drew  /  AP
Randi Collotta, who with husband Christopher Collotta (not pictured), plead guilty to conspiracy and securities fraud, leaves court Thursday.
updated 5/10/2007 9:17:43 PM ET 2007-05-11T01:17:43

A married couple, both lawyers, pleaded guilty to conspiracy and securities fraud Thursday in what was described as one of the biggest insider-trading operations since the 1980s, a $15 million scam that reached into some of the nation’s top financial firms.

Randi Collotta, 30, a former employee of Morgan Stanley and Co. in Manhattan, and her husband, Christopher Collotta, 34, who worked in private practice, were among 13 people who were criminally charged in the case.

The couple received $9,000 in kickbacks for inside tips that generated more than $600,000 in illegal profits, Assistant U.S. Attorney Andrew Fish said.

In a plea deal with the government, Randi Collotta agreed not to appeal any sentence as long it’s between one and 1½ years in prison. Christopher Collotta vowed not appeal any sentence from 10 months to a year and four months in prison. U.S. District Judge Victor Marrero set sentencing for Sept. 7.

They remain free on $250,000 bail each.

Randi Collotta, sobbing through much of the proceeding, said she agreed in September 2004 with her husband to provide inside information she obtained in her job at Morgan Stanley to a broker, Marc Jurman of Palm Beach Garden, Fla. Jurman pleaded guilty in March to conspiracy and securities fraud. He was also named in a Securities and Exchange Commission complaint earlier this year.

She said she told her husband about pending mergers and acquisitions between September 2004 and July 2005.

“I knew my husband would share the information with Marc Jurman,” she said.

She added: “I understood my actions were wrong and I accept responsibility for what I did.”

Fish said Jurman shared that inside information with others, resulting in several hundred thousand dollars in illegal profits beyond $38,500 Jurman pocketed after trading securities based on what the Collotas had told him.

After the plea, Randi Collotta declined to comment. Her lawyer, Kenneth Breen, said, “Randi Collotta accepted responsibility for what she did and today took a significant step in putting this behind her.”

Christopher Collotta, like his wife, said in court that he knew he acted illegally and accepted responsibility. He declined to comment outside court as well.

His lawyer, Brian Rafferty, issued a statement outside court saying his client “deeply regrets his actions in participating in these offenses, and realizes that he will have to live with the consequences of his actions for the rest of his life.”

The government said the trading ring relied on insiders at Morgan Stanley and UBS Securities LLC to steal valuable secrets from the companies. It also alleged a Banc of America Securities LLC broker accepted kickbacks and that two former representatives of Bear Stearns & Co. obtained proprietary UBS information.

The SEC has described the case as one of the most pervasive Wall Street insider trading rings since Ivan Boesky and Dennis Levine engaged in notorious insider-trading schemes during the 1980s.

According to prosecutors, Randi Collotta was an associate in Morgan Stanley’s global compliance division during the conspiracy.

When they announced the case in March, prosecutors and SEC officials said the defendants included registered representatives, compliance personnel and hedge fund portfolio managers who traded hundreds of tips over five years. U.S. Attorney Michael Garcia said Wall Street professionals repeatedly traded on secrets revealed to them by insiders at UBS and Morgan Stanley.

Stock upgrades and downgrades by UBS and impending corporate acquisitions involving Morgan Stanley clients were relayed before the news hit the market, authorities said.

The SEC said ringleaders working the UBS side of the scheme went to great lengths to hide their actions through clandestine meetings, disposable cell phones and secret codes.

At least three people have already pleaded guilty to charges in the case and await sentencing.

Meanwhile, Jennifer Wang, who also worked at Morgan Stanley, and her husband, Ruben Chen, of Englishtown, N.J., were charged Thursday in an unrelated insider-trading case with conspiracy and securities fraud.

Prosecutors said Wang made $600,000 on secrets she stole from Morgan Stanley while she was a vice president. She and Chen, a vice president at ING Investment Management Americas, resigned after investigations began. After a brief court appearance late Thursday, Wang and Chen were each released on $2 million bail. Chen is required to submit to electronic monitoring.

A defense lawyer did not immediately return a telephone call for comment.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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