Authorities in New York announced today the indictment of Joseph Contorinis, a former portfolio manager at Jefferies Group (JEF) asset-management unit, on fraud charges in what prosecutors said was a $7.2 million insider-trading ring.
Another person charged in the case is Nicos Stephanou, an associate director of mergers and acquisitions at UBS AG’s (UBS) London office.
Authorities contend that Stephanou, who pleaded guilty to conspiracy and securities-fraud charges in May, leaked confidential information to Contorinis about pending mergers and acquisitions in which UBS was acting as an adviser between 2004 and June 2006, including the acquisition of the supermarket chain Albertsons Inc. According to the indictment, Stephanou, a 34-year-old citizen of Cyprus who lives in London, provided Contorinis with developments on the deal’s progression, who then traded on the information. A hedge fund account controlled by Contorinis allegedly raked in profits of more than $7 on trading in shares of Albertson’s.
“Stephanou had access to and learned material information about merger and acquisition transactions,” the indictment says. [Bloomberg]
Today’s development follows the indictments made yesterday against 14 people in a wide insider trading ring, involving Galleon Group founder Raj Rajaratnam.
Cantorinis’ indictment isn’t related to the Rajaratnam case.