[JURIST] Two lawyers pleaded guilty Thursday to participating in a massive insider trading scheme that US federal prosecutors have called the most extensive such fraud uncovered since the 1980s. Former Morgan Stanley [corporate website] lawyer Randi Collotta and her husband Christopher admitted to conspiracy and securities fraud [DOJ press release] in Manhattan federal court. The couple is among 13 defendants charged [press release, PDF; JURIST report] "with participating in two massive insider trading schemes and in two separate bribery schemes" that netted more than $8 million dollars in illegal profits for themselves and the hedge funds with which the defendants were affiliated. Also indicted is Mitchel Guttenberg, executive director and institutional client manager at UBS AG [corporate website], who sold two co-defendants material, nonpublic information regarding upcoming upgrades and downgrades in UBS analysts' securities recommendations. Besides the Collottas, four defendants have pleaded guilty to conspiracy, securities fraud, and commercial bribery charges.

Morgan Stanley agreed to pay a $10 million settlement [JURIST report] to the Securities and Exchange Commission [official website] last June without admitting or denying allegations made by the SEC that the corporation had failed to protect against potential misuse of insider trading information as required by law. Also Thursday, another former Morgan Stanley lawyer, Jennifer Wang, and her husband Ruben Chen were arrested for alleged insider trading [DOJ press release]. Reuters has more.