SEC ANNOUNCES FORMER SECURITIES PROFESSIONAL WILL PAY FINE AND SENTENCED TO PRISON

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

Former Securities Professional Aleksey Koval Settles Insider Trading Case

The Securities and Exchange Commission announced that on October 7, 2013, the Honorable Alvin K. Hellerstein of the United States District Court for the Southern District of New York entered a final judgment against Aleksey P. Koval a/k/a Alexei Koval, formerly a registered securities professional. Koval had been charged with involvement in a long-running insider trading scheme in which a former UBS investment banker tipped Koval about eleven impending acquisitions, tender offers, or other business combinations. Koval traded on the basis of that information and tipped another couple, who also participated in the trading.

The Commission's complaint, filed on March 24, 2010, alleged that, from at least July 2005 through February 2009, Koval participated in an insider trading ring that netted over $1 million in illicit profits. According to the complaint, Koval traded securities in each of the impending corporate transactions based on material, nonpublic information which he obtained from Igor Poteroba, an investment banker in UBS's Global Healthcare Group. Pursuant to the insider trading scheme as described in the complaint, Koval also tipped his friend, defendant Alexander Vorobiev. In a parallel criminal proceeding, Koval pleaded guilty to three counts of securities fraud, was ordered to pay a forfeiture of $1,414,290, and was sentenced to twenty-six months of imprisonment.

Koval consented to the entry of a judgment that permanently enjoins him from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and Rule 14e-3 thereunder. In addition, the final judgment found Koval liable for disgorgement in the amount of $1,086,457, representing profits obtained as a result of the conduct alleged in the Complaint, together with prejudgment interest in the amount of $159,620, with those amounts deemed satisfied by the criminal forfeiture order. The Commission determined not to seek a civil penalty in light of Koval’s term of imprisonment.

Separately, the Commission today issued an administrative order that bars Koval from association with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent, and from participating in any offering of a penny stock, based on his criminal conviction in the parallel proceeding.