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Morgan Stanley Advisor Charged with Insider Dealing

August 18, 2017

Morgan Stanley financial advisor Michael Siva is among seven people charged with making about $5 million trading on illegal leaks made by a former Bank of America employee, Bloomberg writes.

Daniel Rivas, a former employee at Bank of America’s capital-markets technology group, allegedly passed dozens of tips about unannounced deals to two friends, including his girlfriend’s father, James Moodhe, an assistant controller at a brokerage that prosecutors didn’t identify, according to the news service.

Moodhe allegedly passed the tips on to Morgan Stanley’s Siva, whose trades on the leaked deals allegedly made his clients more than $880,000 and $8,000 for himself, Bloomberg writes.

The seven people involved in the ring had made more than 50 trades using confidential information about upcoming mergers and acquisitions, Acting U.S. Attorney Joon Kim in Manhattan said in a statement cited by the news service.

Rivas and Moodhe have already pleaded guilty, says Bloomberg, citing prosecutors.

The two are also cooperating with the prosecution in its criminal case against the other five members of the ring, which in addition to Siva include Roberto Rodriguez, Rodolfo Sablon, Jhonatan Zoquier and Jeffrey Rogiers, according to the news service.

All seven also face a suit from the SEC, which wants to force them to return the profits and pay civil penalties, Bloomberg writes.

Siva has been with Morgan Stanley since 1996 ,and remains registered with the wirehouse, according to his BrokerCheck profile. But the firm tells Bloomberg it’s cooperating with the investigation.

Siva appeared in Manhattan criminal court his week and has been released on bond, according to the news service.

Lawyers for him and Zoquier declined comment to Bloomberg.

A spokesman for BofA Merrill Lynch tells Bloomberg it had fired Rivas in April, and is also cooperating with authorities.

RBC’s capital markets unit hired Rivas after Merrill Lynch let him go, but suspended him this week after finding out about the allegation, a spokeswoman for the bank tells Bloomberg.

Rivas’s and Moodhe’s lawyers didn’t return the news service’s requests for comment.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.
  • To read the Reuters article cited in this story, click here.