Former UBS banker sentenced for insider trading

A former UBS investment banker was sentenced on Monday to 22 months in prison for providing inside information on six healthcare mergers to a trader and then sharing in the profits.

Igor Poteroba pleaded guilty in December to conspiracy to commit securities fraud by tipping off a friend, Alexei Koval, to non-public information related to mergers and acquisitions contemplated by UBS clients, the US Attorney for the Southern District of New York said in a statement.

Koval then traded on this information, generating hundreds of thousands of dollars in illegal profits that he split with Poteroba, the US Attorney's Office said.

According to the US Attorney's Office, Poteroba passed on insider information regarding six publicly traded healthcare companies including Guilford Pharmaceuticals Inc, Molecular Devices Corp, PharmaNet Development Group Inc, Via Cell Inc, Millennium Pharmaceuticals Inc and Indevus Pharmaceuticals Inc.

According to the criminal complaint, the information was passed on from 2005 through February 2009.

Poteroba usually tipped off Koval by telephone prior to the public announcement when one of the healthcare companies was to be acquired. Koval and another unnamed conspirator would buy the securities using the information Poteroba provided, the US Attorney said.

US District Judge Paul Crotty also sentenced Poteroba, of Darien, Connecticut, to three years of supervised release and ordered him to forfeit the USD 465,095.21 he made from the trades. Poteroba also was ordered to pay a USD 25,000 fine. The court will determine restitution later, the US Attorney's office said.

Koval, of Chicago and Pasadena, California, pleaded guilty to related charges in January and is scheduled to be sentenced on May 24.