A former stock loan trader at Morgan Stanley and Bank of America Corp was sentenced to one year and one day in prison, after pleading guilty to a conspiracy charge over a scheme to steer orders to other brokerage firms in return for kickbacks.  The defendant, Salvatore Zangari, left M. Stanley in May 2005, then worked at BofA until October 2006, and then worked at UBS AG until July 2009.  Mr. Zangari, who was sentence in federal court in Brooklyn, NY - could have faced as much as 5 years;  prosecutors recommended 1.5 to 2 years. 

"This is what happens when a good person does a bad thing."  "While the sentence was shorter than recommended by the guidelines, one of the goals of sentencing is deterrence, and the judge, justifiably so, pronounced the sentence to deter future criminal conduct." -- Zangari's lawyer.

There have been at least 32 convictions, including former traders at 13 brokerages, in the Eastern District relating to a probe into alleged bribes and kickbacks in the stock loan industry.  The probe has focused on stock loan traders at several brokerages who were accused of funneling millions of dollars of illegal "finder's fees" to others in exchange for cash bribes or other payments.  The SEC had brought a related civil lawsuit against Zangari. 

The criminal case is U.S. v. Zangari, U.S. District Court, Eastern District of New York, No. 10-00255.   [Reuters, 10/29]