Frequent Flyers, Potatoes, and Macy's -- One Defendant Settles with the SEC

September 29, 2010


On March 25, 2010, at published a detailed analysis at of Securities and Exchange Commission v. Igor Poteroba, Aleksey Koval and Alexander Vorobiev (SDNY March 24, 2010), which alleged that Defendant Igor Poteroba, a high-ranking investment banker in UBS Securities LLC's Global Healthcare Group in New York City, tipped his friend Defendant 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. Koval also tipped their friend Defendant Alexander Vorobiev, who traded ahead of four of the deals.

Among the means of communication allegedly used to illegally tip and trade on the inside information were coded e-mail messages that referred to securities and money as "frequent flyer miles" and "potatoes." One e-mail exchange about insider trading was purportedly a discussion about a Macy's wedding registry.

Defendant Poteroba recently entered into a settlement with the SEC.