After pleading guilty to a conspiracy charge over a scheme to steer orders to other brokerage firms in return for kickbacks. -Reuters
Sat, Oct 30, 2010
NEW YORK, US – A former stock loan trader at Morgan Stanley (MS.N) and Bank of America Corp was sentenced to one year and one day in prison after pleading guilty to a conspiracy charge over a scheme to steer orders to other brokerage firms in return for kickbacks.
The defendant, Salvatore Zangari, was sentenced on Friday by U.S. District Judge John Gleeson in Brooklyn, New York, a spokesman for U.S. Attorney Loretta Lynch said.
The sentence was shorter than the 1-1/2 to two years recommended under federal sentencing guidelines. Zangari could have faced as much as five years in prison.
“This is what happens when a good person does a bad thing,” Zangari’s lawyer Randy Zelin said in an interview.
“While the sentence was shorter than recommended by the guidelines, one of the goals of sentencing is deterrence, and the judge, justifiably so, pronounced the sentence to deter future criminal conduct.”
There have been at least 32 convictions, including former traders at 13 brokerages, in the Eastern District relating to a probe into alleged bribes and kickbacks in the stock loan industry, where brokerages act as intermediaries between buyers and sellers seeking to borrow securities.
The probe focused on stock loan traders at several brokerages who were accused of funneling millions of dollars of illegal “finder’s fees” to others in exchange for cash bribes or other payments.
The U.S. Securities and Exchange Commission had brought a related civil lawsuit against Zangari.
It said the defendant left Morgan Stanley in May 2005, then worked at Bank of America until October 2006, and then worked at UBS AG until July 2009. –REUTERS