We took the floor on Friday to give a rather lengthy lecture on how “not every corporate misdeed is a crime, and not every, uhm, mis-doer is a criminal,” so logic would have it that we wouldn’t deign to keep you abreast of possible no-no’s happening over at UBS. Because that would be hypocritical and make us look flakey and whatnot. But let’s just say, for a second, we hadn’t done that and that our words weren’t coming back to bite us in the ass, as it were, now. Then we could tell you about this without fear of public scorn and ridicule, right? Deal? Deal.
…federal authorities are on the verge of busting a scheme in which at least one employee of UBS (UBS) was allegedly selling information about upcoming changes in analyst ratings on stocks to traders not affiliated with the Swiss investment firm.
Sources says federal prosecutors in New York and securities regulators in Washington will soon file charges against a number of individuals caught up in the investigation, which has been going on since last fall. Criminal and civil charges could be filed as soon as Tuesday. Investigators have found that traders working for at least two unidentified hedge funds were paying a UBS employee in New York for the information about impending ratings changes on stocks. But other traders were also buyers.
Sources say the traders often got one-day advance notice of an impending change on a stock rating by a UBS analyst. The information allowed the traders to buy or sell shares ahead of the change's public disclosure, so they could take advantage of any price swings in the stock. People familiar with the inquiry say authorities contend it was improper for the traders to act on the information, since news of the impending ratings changes was still confidential and not yet made public.
Also, and this is by no means a way for us to weasel out of the situation, but we totally meant to include Matthew Goldstein, the chap who wrote this article, in our list of journalists we’d like to nail who we've deemed worthy to discuss this subject. So, yeah.
Charges Pending in UBS Payoff Case [UBS]