Former Jeffries exec busted

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  1. xeastend

    xeastend Active Member

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    Some of Harrys buisness partners. Got this from CNN

    By Chad Bray

    Of DOW JONES NEWSWIRES

    NEW YORK -(Dow Jones)- A onetime portfolio manager at Jefferies Group Inc.'s ( JEF) asset-management unit and another man were arrested Thursday in an insider- trading case that allegedly reaped more than $7 million in illicit profits.

    Joseph Contorinis, a former portfolio manager for a hedge fund in Jefferies' asset-management unit, and Michael Koulouroudis have been charged with conspiracy and securities fraud. They were arrested Thursday by the Federal Bureau of Investigation.

    Contorinis, 44, of Fort Myers, Fla., and Koulouroudis, 58, of Brooklyn, N.Y., are among four people who have been charged criminally in the matter.

    Nicos Achillea Stephanou, a UBS AG (UBS) investment banker, was arrested in the case in December and charged with conspiracy and two counts of securities fraud. He has been in custody since shortly after his arrest. The charges against Stephanou became public Thursday.

    Koulouroudis is a close family friend of Stephanou, 34, of London.

    Last month, Ramesh Chakrapani, a onetime Blackstone Group (BX) executive, was separately charged with conspiracy and securities fraud in an insider-trading scheme involving shares of Albertson's Inc.

    On Thursday, the U.S. Securities and Exchange Commission separately brought civil charges against seven people in the matter, including Stephanou, Koulouroudis, Contorinis and Chakrapani. The SEC claims the scheme resulted in more than $8 million in illegal profits and losses avoided.

    The SEC also brought charges against Stephanou's father, as well as a former Stephanou classmate and his father.

    In a separate civil case last month, the SEC alleged Chakrapani engaged in a $ 3.6 million insider-trading scheme involving Albertson's shares.

    Michael F. Bachner, a lawyer for Koulouroudis, declined to comment Thursday.

    Lawyers for Contorinis and Stephanou didn't immediately return phone calls for comment on Thursday. Contorinis and Koulouroudis are expected to appear before a federal magistrate judge later Thursday.

    Tom Tarrant, a Jefferies spokesman, confirmed Contorinis left Jefferies a year ago and declined further comment, citing company policy.

    Prosecutors have alleged Stephanou worked on the acquisition of Albertson's Inc. in 2006 and had access to nonpublic information through his work about a proposed acquisition of ElkCorp by a private-equity firm in 2006. He allegedly tipped others about the deals before they became public.

    The SEC, in its civil case, described the case as an insider-trading ring involving Stephanou and Chakrapani, who are friends and formerly worked together at Credit Suisse Group (CSR).

    Federal prosecutors alleged Contorinis received a tip from an investment banker concerning the acquisition of Albertson's prior to the public announcement of the deal in January 2006. A hedge fund account controlled by Contorinis allegedly reaped profits of $7.2 million on trading in shares of Albertson's.

    Albertson's was sold in 2006 to a consortium of investors that included Supervalu Inc. (SVU), CVS Caremark Corp. (CVS) and an investor group led by Cerberus Capital Management LP.

    Separately, Koulouroudis allegedly was tipped by the banker about the Albertson's discussions and the proposed acquisition of ElkCorp by a private- equity firm, prosecutors said.

    He allegedly avoided a $99,000 loss on Albertson's shares in December 2005 by selling his shares before it was announced that talks to acquire Albertson's broke off and made profits of $132,000 by buying shares before the acquisition was publicly announced in January 2006, prosecutors said.

    Koulouroudis also allegedly made profits of $138,000 after he was tipped that ElkCorp had agreed to be acquired by a private-equity firm in December 2006. After a competing offer, ElkCorp ultimately was acquired by Building Materials Corp. of America in 2007.

    The SEC also alleged in the civil case that Chakrapani, Stephanou, his father and Koulouroudis engaged in a scheme to trade ahead of the announcement of an acquisition of National Health Investors Inc. based on a tip by Chakrapani.

    -By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
     

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