How are investors supposed to have faith in the system when some of the biggest names on Wall Street - including UBS, Morgan Stanley, Banc of America and Bear Stearns - have allegedly been conspiring to manipulate the market and exchanging insider information?
The case alleges that people were tipped off about stock upgrades and downgrades by UBS and impending corporate acquisitions involving Morgan Stanley clients, allowing investors to cash in before the news hit the market.The question now is how long will the executives of these high profile companies survive? With such a widespread web of corruption, the only honorable thing to do is to step down in disgrace.
The SEC said the ringleaders of the UBS part of the scheme went to great lengths to hide their illegal conduct, with tactics including a clandestine meeting at Manhattan's famed Oyster Bar and eventually the use of disposable cell phones, secret codes and cash kickbacks.
In all, 13 people have been arrested in the criminal case. The SEC brought civil charges against 11 individuals and three entities.
Among financial professionals charged criminally in U.S. District Court in Manhattan was Mitchel Guttenberg, an executive director and institutional client manager at UBS.
Garcia said Guttenberg, who worked in UBS's equity research department, accepted hundreds of thousands of dollars as he sold nonpublic information to two men regarding upcoming upgrades and downgrades by UBS analysts.
