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Accomplice of Former UBS Investment Banker
Pleads Guilty in Manhattan Federal Court
to Insider Trading
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced today that MICHAEL
KOULOUROUDIS, an accomplice of a former UBS investment banker,
pleaded guilty before United States District Judge PAUL G.
GARDEPHE on charges of conspiracy and securities fraud as a
result of trading based on inside information stolen from UBS.
According to the Complaint and Superseding Indictment
previously filed in this case, and statements made during
KOULOUROUDIS's guilty plea:
From 2005 through November 2006, KOULOUROUDIS executed
securities trades based on material, nonpublic information about
mergers and acquisitions that KOULOUROUDIS received from NICOS A.
STEPHANOU, who was working as an investment banker at UBS's New
York, New York, and London, England offices. STEPHANOU and
KOULOUROUDIS had a close personal friendship. KOULOUROUDIS knew
that STEPHANOU was tipping him in violation of STEPHANOU's duty
of confidentiality to his employer and its clients.
Specifically, from late 2005 through early 2006, STEPHANOU was on
the investment banking team representing a private equity firm
that was interested in acquiring Albertson's Corporation. During
the course of the transaction, STEPHANOU tipped KOULOUROUDIS
about positive and negative developments on the deal, and
KOULOUROUDIS executed trades based on that information. Later,
in September 2006, STEPHANOU obtained and then provided material,
nonpublic information about ElkCorp's exploration of strategic
alternatives to KOULOUROUDIS who, in turn, executed trades based
on that information. As a result of his illegal trading,
KOULOUROUDIS reaped profits of nearly $200,000 in multiple
trading accounts.
KOULOUROUDIS pleaded guilty to one count of conspiracy
to commit securities fraud and one count of securities fraud
(Count Five). The conspiracy charge carries a maximum sentence of five years in prison and a maximum fine of the greater of
$250,000, or twice the gross gain or gross loss from the offense.
The securities fraud count carries a maximum sentence of 20 years
in prison and a maximum fine of $5 million, or twice the gross
gain or loss from the offense.
KOULOUROUDIS, 59, of Brooklyn, New York, is scheduled
to be sentenced on February 11, 2010, by Judge GARDEPHE.
Mr. BHARARA praised the work of the Federal Bureau of
Investigation and thanked the United States Securities and
Exchange Commission for its assistance.
Assistant United States Attorneys ANDREW L. FISH and
REED M. BRODSKY are in charge of the prosecution.
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