The US market regulator has charged three individuals, including an investment banker with UBS, for running an insider trading ring.
The three people raked in "illicit" profits worth $1 million by trading ahead of at least 11 mergers, acquisitions and other corporate deals, according to the US Securities and Exchange Commission (SEC).
Going by the charges, the insider trading activities was carried out with the help of coded email messages that referred to securities and money as "frequent flyer miles" and "potatoes".
"Igor Poteroba, a high-ranking investment banker in UBS Securities LLC's Global Healthcare Group in New York City, tipped his friend Aleksey Koval with highly confidential inside information about impending transactions involving pharmaceutical companies.
"Koval, who held positions at securities industry firms at the time, then traded in stocks and options of the companies targeted for acquisition," the regulator said in a statement on Wednesday.
Moreover, Koval tipped their friend Alexander Vorobiev, who traded ahead of four of the deals. The insider trading scheme began in July 2005.
"They thought it was clever to use code words such as frequent flyer miles and wedding registry gifts to conceal their insider trading scheme," Director for SEC's Division of Enforcement Robert Khuzami said.
In a separate development, the market regulator has filed fraud charges against a Mexican realtor for an $80 million Ponzi scheme.
As per the complaint, Douglas F Vaughan through his company The Vaughan Company Realtors issued promissory notes, that he claimed would generate high fixed returns for investors.
Vaughan also used another entity Vaughan Capital LLC to solicit investors for different types of realty-related investments, such as buying residential properties at distressed prices.
In another statement on Wednesday, the SEC noted that Vaughan relied entirely on new money raised from investors through both companies to fund obligations to note holders.
