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Bloomberg
A longtime Morgan Stanley broker and financial adviser pleaded not guilty to trading on secret tips about pending mergers and acquisitions leaked by a Bank of America Corp. consultant.
Michael Siva, 55, got the information from a close friend, James Moodhe, whose daughter was dating the consultant at the centre of the case, Daniel Rivas, prosecutors said in an August indictment. In a statement, Morgan Stanley described Siva as a former wealth management employee and didn’t provide details about his apparent departure from the company.
Siva, of West Orange, New Jersey, is one of seven people charged in the alleged scheme. Rivas and Moodhe have pleaded guilty and are cooperating with the government.
Prosecutors said Rivas gave the hand-written tips to his girlfriend to give to her father, who then passed them on to Siva using code phrases on the phone or by reading them aloud at secret meetings.
Wearing a dark blue suit and saying little, Siva entered his plea in a nearly empty federal courtroom in Manhattan. US District Judge Alison Nathan extended the former broker’s bail and set a three-week trial for September 2018.
The others charged are friends and associates of Rivas and Moodhe, who created several “tipping chains†that benefited different groups, according to prosecutors. Rivas’s girlfriend wasn’t charged.
Assistant US Attorney Andrea Griswold told the judge that the government would provide “voluminous†trading records, text messages and emails to prove its case. Siva’s lawyer, Paul Shechtman, declined to comment. Moodhe passed Rivas’ inside information to Siva from at least 2015 to April 2017, so Siva could use it to execute profitable trades for himself and his clients, including Moodhe, prosecutors said. Their in-person meetings, at diners outside New York City, were intended to avoid detection, according to the US.
BofA Merrill Lynch said that it fired Rivas and is cooperating with the government. Siva and Moodhe made a total of more than $3 million by trading before and after deals were announced, while Siva also made thousands of dollars on commissions, the US said.