The Securities and Exchange Commission announced that on September 21, 2010, the Honorable Alvin K. Hellerstein of the United States District Court for the Southern District of New York entered a judgment of permanent injunction against Igor Poteroba, formerly an investment banker with UBS Securities LLC (“UBS”), who had been charged with insider trading for misappropriating highly confidential inside information from UBS about eleven impending acquisitions, tender offers, or other business combinations, and tipping a friend, also a financial professional, who traded securities on the basis of the tipped inside information. The insider trading yielded more than $1 million in illicit profits. The Court’s order permanently enjoins Poteroba from violating certain antifraud provisions of the federal securities laws. The judgment resolves only the Commission’s claims of liability against Poteroba. The Commission’s claims for disgorgement of illicit profits and a civil penalty against Poteroba will be ruled upon by the Court at a later date.
The Commission’s complaint, filed on March 24, 2010, alleged that, from at least July 2005 through February 2009, Poteroba participated in an insider trading ring that netted over $1 million in illicit profits. According to the complaint, Poteroba was the source of material, nonpublic information about eleven impending corporate transactions, which he obtained through his work as an investment banker in UBS’s Global Healthcare Group. Poteroba misappropriated the material, nonpublic information from his employer and its clients in breach of duties of confidentiality that he owed them. Pursuant to the insider trading scheme as described in the complaint, Poteroba tipped his friend, defendant Aleksey Koval, with the material nonpublic information, and Koval, in turn, tipped his friend, defendant Alexander Vorobiev. The Commission’s complaint alleges that both Koval and Vorobiev traded securities on the basis of the material, nonpublic information tipped to Koval by Poteroba.
Without admitting or denying the allegations in the complaint, Poteroba has consented to the entry of a judgment that permanently enjoins him from committing future violations Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, which are antifraud provisions of the federal securities laws, and Section 14(e) of the Exchange Act and Rule 14e-3 thereunder, which are tender offer fraud provisions.
On September 28, 2010, the Commission issued an order pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Investment Advisers Act of 1940 barring Poteroba from association with any broker, dealer, or investment adviser. Poteroba consented to the issuance of the order without admitting or denying the findings therein.
The Commission’s civil action against defendants Koval and Vorobiev, and relief defendants Tatiana Vorobieva and Anjali Walter, remains pending before the Court.
On July 26, 2010, the U.S. Attorney for the Southern District of New York filed a criminal information charging Poteroba with securities fraud and conspiracy to commit securities fraud.