Former Wall Street hedge fund manager David Slaine made more than $500,000 from an insider trading tip that he got in 2002 from a former UBS Securities executive who is now in prison, the US Securities and Exchange Commission said, according to media reports.
Mr Slaine, formerly of DSJ International Resources, or Chelsey Capital, used the confidential information to trade ahead of UBS analyst recommendations, the SEC said in a civil securities fraud complaint filed in Manhattan Federal Court.
Mitchel Guttenberg, a former UBS executive who is serving a 78-month prison sentence following conviction on criminal charges of insider trading, gave the tip to Mr Slaine, the complaint said.
The financial turmoil has brought to light a number of proven or alleged insider trading scandals and other crimes, the most notorious of which has been the $65 billion Ponzi scheme fraud of Bernard Madoff. These events have put further pressure on the wealth management industry to improve due diligence checks on investments and individuals entrusted with clients’ money.