A former Morgan Stanley and Co. lawyer and her husband, also an attorney, won leniency Thursday in a major insider trading case that resulted in more than $600,000 in profits for others but only $9,000 for them for their tips.
U.S. District Judge Victor Marrero sentenced Christopher and Randi Collota to six months of home confinement and Randi Collotta, 30, to 60 days in the custody of federal prison authorities on nights and weekends.
The judge cited the severe illnesses of Christopher Collotta, 34, as a reason to sentence the couple to shorter terms than they had agreed to serve when they entered guilty pleas in May to conspiracy and securities fraud. She had faced up to 18 months. He had faced up to 16 months.
The Collottas, among 13 people criminally charged in the case, also were ordered to pay $3,000 fines. Being in federal custody only at night and on weekends will allow Randi Collota to continue working at her new job and keep health her insurance coverage.
Her husband's lawyer, Brian Rafferty, said his client was a "terribly sick man" who had cancer in high school and has had such severe heart problems since then that he has two devices embedded in his chest to regulate his heart and has undergone several heart surgeries.
When the case was announced in March, the Securities and Exchange Commission called it one of the most pervasive Wall Street insider trading rings since the days of Ivan Boesky and Dennis Levine in the mid-1980s.
Besides the Collotas, the defendants — included registered representatives, compliance personnel and hedge fund portfolio managers — improperly acted on hundreds of tips during five years of illegal trading, the government said.
Randi Collotta sobbed as she watched her husband's sentencing and continued sobbing as she apologized.
"As a result of my terrible decision, I sacrificed everything I've fought for in my life," she said, noting she had lost her license to practice law and to work in the securities industry.
She said her concern remains with her husband.
"I promise to love, honor and cherish him in sickness because I have never known him to have any days of health," she said.
Her husband also apologized before he was sentenced, saying he accepts "full responsibility for the serious crimes I committed."
Kenneth Breen, who represented Randi Collotta, told the judge her "life is a wreck as a result of her actions."
When Randi Collotta pleaded guilty, she told the judge she had agreed with her husband in September 2004 to give inside information she got in her job at Morgan Stanley to a broker, Marc Jurman, of Palm Beach Gardens, Fla. Jurman pleaded guilty in March to conspiracy and securities fraud.
Collotta said she told her husband about pending mergers and acquisitions between September 2004 and July 2005, knowing he would share the information with Jurman.