An investment banker with UBS and a friend were accused by authorities of profiting from insider trading, the FInancial Times reported.
The U.S. Attorney's office in New York filed criminal charges against Igor Poteroba, a healthcare banker in the Swiss bank's New York office, and his friend, Aleksey Koval; the two were arrested on March 24 by the FBI, according to the paper.
The Securities and Exchange Commission filed civil charges (now available online) on March 24 that alleged Poteroba tipped off Koval with "highly confidential inside information" regarding 11 transactions involving pharmaceutical companies. The SEC said that they and a third man made about $1 million in profits from their activities.
Poteroba joined UBS in 1999, the paper said, and has been placed on administrative leave. UBS, which was not charged, said it was co-operating with the authorities.
Poteroba allegedly used an elaborate system of coded e-mail messages in which securities and money were referred to as "frequent flyer miles" and "potatoes."
Koval would share these tips with another friend, Alexander Vorobiev, who traded ahead of four deals and was named in the SEC complaint.
The three are Russian citizens who attended the University of New Haven in Connecticut.