Leniency Won For Couple in Trading Scheme
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A former Morgan Stanley & Co. employee and her husband, both lawyers, won leniency yesterday, receiving six months of home confinement in a major insider trading case that resulted in more than $600,000 in profits for others but only $9,000 for them for their tips.
U.S. District Judge Victor Marrero also ordered Randi Collotta, 30, to serve 60 days in the custody of federal prison authorities on nights and weekends so she can continue working a new job and keep health insurance coverage. The judge cited the severe illnesses of Mrs. Collotta’s husband, Christopher Collotta, 34, as a reason to sentence both of them to less than the prison terms they had agreed to serve without appeal when they entered guilty pleas in May to conspiracy and securities fraud. She had faced up to 18 months, he had faced up to 16 months. The Collottas, among 13 people criminally charged in the case, also were ordered to pay $3,000 fines.
When the case was announced in March, the Securities and Exchange Commission called it one of the most pervasive Wall Street insider trading rings since the days of Ivan Boesky and Dennis Levine in the mid-1980s.
Besides the lawyers, defendants including registered representatives, compliance personnel, and hedge fund portfolio managers improperly relied on hundreds of tips during five years of illegal trading, the government said.
Randi Collotta sobbed as she watched her husband get sentenced. She continued sobbing as she apologized.