Former Morgan Stanley Compliance Officer And Her Husband To Plead Guilty For Involvement In Insider Trading Scheme

Randi Collotta, an Ex-Morgan Stanley compliance officer and attorney, and her husband, Christopher Collotta, are slated to plead guilty on May 10, 2007 for their involvement in one of the largest insider trading schemes to take place on Wall Street since the 1980’s.

Randi Collotta is accused by U.S. prosecutors of informing her husband and Marc Jurman, a Florida broker, of deals that were pending, including Adobe Systems Inc.’s $3.4 billion buy of Macromedia Inc. and the $2.1 billion acquisition of Argosy Gaming Co. by Penn National Gaming Inc.

The charges against the couple are part of U.S. prosecutors’ crackdown against Morgan Stanley employees that are accused of involvement in insider trading. 13 people have been charged in separate schemes that took place over a 5 year period and generated the participants over $15 million in illegal profits.

Although prosecutors that had initially charged Collotta in 2005 said she faced over 10 years in prison, she will be sentenced to less time because of federal sentencing guidelines.

Four other defendants charged in these schemes have pled guilty. Charges are still pending against nine others, including Mitchel Guttenberg, a former UBS executive director. According to prosecutors, he offered to pay back a $25,000 loan to a hedge fund trader-Erik Franklin-by giving him analyst ratings in advance.

The two men purchased and used disposable cell phones to send each other coded messages so their scheme wouldn’t be found out. Although Franklin has pled guilty, Guttenberg says he is innocent.

Last week, U.S. prosecutors in Manhattan accused Hafiz Naseem, a junior investment banker with Credit Suisse Group, of giving a banker in Pakistan tips. The scam has already generated at least $7.5 million. Ex-Goldman Sachs Group Inc/ and Merrill Lynch & Co. employees are facing insider trading charges in other cases.

At Shepherd Smith and Edwards, we have helped our clients, who have been the victims of securities fraud, collectively recover millions of dollars. We have represented clients in more than 1,000 matters in arbitration and mediation proceedings, and we have a very succesful track record for getting results. Contact Shepherd Smith and Edwards to schedule your free consultation.

Ex-Morgan Stanley Executive, Husband to Plead Guilty, Bloomberg.com, May 7, 2007
Related Web Resources:

Guilty Pleas Expected in Big Insider Trading Case, Reuters, January 20, 2016
SEC Charges 14 Defendants in Wall Street Insider Trading Ring, Including Personnel at UBS Securities LLC, Morgan Stanley & Co., Inc. and Bear, Stearns & Co., Inc., SEC.gov, March 1, 2007