A former managing director of UBS Securities in its Healthcare Group pleaded guilty to three counts of securities fraud and one count of conspiracy to commit securities fraud last week. U.S. v. Poteroba (S.D.N.Y. Filed March 24, 2010) (originally discussed here). According to the court papers, Igor Poteroba obtained inside information regarding upcoming merger transactions involving six publicly traded healthcare companies: Guildford Pharmaceuticals, Inc., Molecular Devices Corporation, PharmaNet Development Group, Inc. and Via Cell Pharmaceuticals, Inc.

After acquiring the inside information regarding the then pending transactions, Mr. Poteroba passed it to Alexei Koval, an employee at Citigroup Asset Management and another individual identified as CC-1. Mr. Koval and CC-1 would purchase securities in the healthcare company following receipt of the tip. Those securities were then sold at a profit after the public announcement of the deal.

Mr. Koval and CC-1 are alleged to have executed dozens of securities transactions based on the inside information. Mr. Poteroba was paid a portion of the trading profits by Mr. Koval, both of whom are Russian nationals. Sentencing is scheduled for March 16, 2011.

The SEC filed a parallel action at the time the criminal case was brought. The Commission’s complaint includes the allegations from the criminal case and adds claims regarding another five deals. SEC v. Poteroba, Case No. 10-Civ 2667 (S.D.N.Y. Filed March 24 2010) (also discussed here). Previously, that case was partially settled with Mr. Poteroba consenting to the entry of a permanent injunction prohibiting future violations of Exchange Act Sections 10(b) and 14(e). He also consented to the entry of an order barring him from association with any broker or dealer or investment advisor. Questions regarding disgorgement and penalties remain pending.