|
NY jury convicts ex-Morgan Stanley exec
|
|
(March 25, 2009 - Wednesday) - http://www.reuters.com/article/domesticNews/idUSTRE52O06720090325
LOS ANGELES (Reuters) - A New York jury on Tuesday convicted a former Morgan Stanley Co supervisor of securities fraud and other charges for his part in a kickbacks scheme involving the stock-loan industry.
After a weeklong trial, Darren DeMizio was convicted of conspiring to commit securities fraud and wire fraud, and of making a false statement to FBI agents, prosecutors said.
He faces up to 25 years in prison on the securities and wire fraud conspiracy and up to 5 years on the false statement charge. His sentencing is set for June 19.
Twenty-eight other individuals, including DeMizio's brother, have pleaded guilty to charges stemming from the scheme, in which securities traders accepted millions of dollars in kickbacks for themselves or family members from stock-loan "finders."
Securities firms often borrow and loan securities among themselves to facilitate short-sale transactions. Stock-loan finders help the firms locate inventories of a stock and match borrowers and lenders.
"Today's conviction sends a clear message that the culture of corruption and kickbacks in the securities lending industry that victimized shareholders and the investing public will not be tolerated," U.S. Attorney Benton Campbell of the Eastern District of New York said in a statement.
DeMizio's attorney could not be reached for comment.
DeMizio, formerly the head of Morgan Stanley's domestic securities lending desk, was accused of routinely directing Morgan Stanley stock-loan business to two stock finders in exchange for kickbacks and bribes paid to his brother and father from the 1990s through 2003.
The payments, which totaled $1.6 million from 2000 to 2004 alone, were disguised as finders' fees.
The investigation into bribery and kickbacks resulted in guilty pleas by traders at A.G. Edwards, Janney Montgomery Scott LLC, JPMorgan Chase & Co, Kellner Dileo & Co Inc and Oppenheimer & Co.
DeMizio also faced civil charges, previously filed by the U.S. Securities and Exchange Commission.
(Reporting by Gina Keating; Editing by Gary Hill)
|
