FROM: U.S. SECURITIES AND EXCHANGE COMMISSIONCourt Enters Final Judgments Against Former Wall Street Banker, Downstream Russian Trader and Trader’s Wife in Insider Trading Scheme
The Securities and Exchange Commission announced that on January 14, 2013, the Honorable Alvin K. Hellerstein of the United States District Court for the Southern District of New York entered a final judgment by default against defendant Alexander Vorobiev ("Vorobiev") and his wife, relief defendant Tatiana Vorobieva ("Vorobieva") (collectively, the "Vorobievs"), for their role in a serial scheme involving insider trading ahead of numerous health care-related acquisitions, tender offers, and other transactions.
Also, the Commission announced that on October 3, 2012, Judge Hellerstein entered a final judgment against Igor Poteroba ("Poteroba"), formerly an investment banker with UBS Securities LLC ("UBS"), who also had been charged in this matter with insider trading for misappropriating highly confidential inside information from UBS about those health care transactions and tipping that information to his friend, Aleksey Koval ("Koval"), also a financial professional, who, in turn, tipped Vorobiev.
The Commission's complaint, filed on March 24, 2010, alleges that, from at least July 2005 through February 2009, Poteroba, Koval, and Vorobiev 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 defendant Koval, with the material, nonpublic information, and Koval, in turn, tipped his friend Vorobiev and placed trades through an account maintained by Vorobiev. The Commission's complaint alleges that both Koval and Vorobiev traded securities on the basis of that information. Because Vorobiev conducted some of the trading using his wife’s accounts, Vorobieva was named as a relief defendant.
Poteroba previously had been permanently enjoined from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and Rule 14e-3 thereunder (see Litigation Release No. 21681 (Oct. 4, 2010)). On September 28, 2010, the Commission entered an order barring Poteroba from association with any broker, dealer, or investment adviser. In a parallel criminal proceeding, on December 21, 2010, Poteroba pleaded guilty to securities fraud and conspiracy to commit securities fraud.
The final judgment in the civil action against Poteroba found him liable for disgorgement in the amount of $416,336, representing profits obtained as a result of the conduct alleged in the Complaint, together with prejudgment interest in the amount of $49,071. The final judgment deemed these amounts satisfied by Poteroba’s payment of a forfeiture of $465,095 in a parallel criminal proceeding. No civil penalty was imposed on Poteroba in the final judgment. In the criminal proceeding, Poteroba had been sentenced to twenty-two months of imprisonment and ordered to pay a penalty of $25,000.
The Vorobievs failed to respond to the complaint and the Commission moved for entry of judgment by default. The final judgment in the civil action against Vorobiev: (1) permanently enjoined him from violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and Rule 14e-3 thereunder; (2) found him liable for disgorgement in the amount of $146,541.20, representing profits obtained as a result of the conduct alleged in the Complaint, together with prejudgment interest in the amount of $21,389.80; and (3) imposed a civil penalty of $1,885,382.12, for a total judgment award of $2,053,313.73. In partial satisfaction of that award, the Court ordered that more than $220,000 in funds held in brokerage accounts in Vorobiev’s name, previously frozen by court order in the SEC’s action, be remitted to the SEC for transfer to the U.S. Treasury.
The final judgment against Vorobieva found her liable for disgorgement in the amount of $481,919.71, representing profits obtained as a result of the conduct alleged in the Complaint, together with prejudgment interest in the amount of $70,343.12, for a total judgment award of $552,262.83. In partial satisfaction of that award, the Court ordered that nearly $125,000 in funds held in brokerage accounts in Vorobieva’s name, also frozen by court order in the SEC’s action, be remitted to the SEC for transfer to the U.S. Treasury.
The Commission's civil action against defendant Koval remains pending before the Court.
