In the suit filed in Miami, the Obama administration wants UBS to turn over information on as many as 52,000 U.S. customers who concealed their accounts from the U.S. government in violation of tax laws.
The FBI arrested a UBS broker Wednesday on charges he leaked insider information about a pending pharmaceutical deal that enabled a friend to make hundreds of thousands of dollars.
Officials said Guilford Pharmaceuticals came to UBS in 2005 seeking advice about selling itself to a third party. Investigators said in emails and phone conversations, Poteroba and Koval discussed the deal and others - including now cooperating witnesses -soon traded stock on that information.
Frequent-flyer miles were often the language used to describe shares bought and sold and the right time to make such trades, court papers said. Profits of $22,000 were made based on the Guilford information, the FBI said.
California-based Molecular biomedical company also asked UBS for advice on multiple bids. Officials said emails with language like "Let me know if you've started your wedding registry at Macy's ... so hurry up" referred to how to deal with Molecular trades. Profits of $26,000 were made in just one week regarding Molecular stock trades, officials said.
PharmaNet Development, Millennium and Indevus among the other medical-related firms that the suspects had access to UBS information and files. Investigators said there is no evidence any of the pharmaceutical firms did anything improper. A UBS spokesman said the firm is cooperating with the FBI. In all, more than $870,000 in illegal profits were made, prosecutors said.
Lawyers for the two defendants were not immediately known. Poteroba was arrested in Darien, CT Wednesday afternoon. Koval was taken into custody in Chicago. A court hearing in the case is scheduled for Thursday in Manhattan federal court.