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A Wall Street Tragedy Plays Out
A Wall Street financial whiz -- described as an unassuming mentor -- has pleaded guilty to a million-dollar insider trading scheme, the Department of Justice announced.
John F. Marshall, a principal at Marshall Tucker & Associates, and a well-known professor of finance and economics at several business schools in the New York City area, filed in the plea in federal court in Manhattan.
Marshall, who lives in Stony Brook, New York, served on the executive committee of the International Securities Exchange, a Manhattan-based options and stock exchange. As a result, he learned that the exchange was planning a cash merger with Eurex Frankfurt AG, a derivative exchange jointly operated by Deutsche Borse AG and SWX Swiss Exchange.
In the months before the April 2007 announcement of the $2.8 billion merger, Marshall told Alan L. Tucker, a professor at Pace University, who made more than $1 million trading on the tips last year, according to the criminal complaint.
In March, the Securities and Exchange Commission also accused him of insider trading. The commission did not say whether Marshall profited personally, but said his brother-in-law, Mark Larson, also bought shares of the exchange's stock based on insider information.
The New York Times last May described Marshall, who co-founded the International Association of Financial Engineering, as "a meticulous scholar and a generous, unassuming teacher." He also lectured at top-flight Wall Street firms about the math-driven area.
Former colleagues and students during his time teaching at St. John's University expressed surprise that Marshall, who resigned from the exchange board, would have been involved.
In the criminal case, Marshall pleaded guilty to one count of conspiracy to commit securities fraud. He is scheduled to be sentenced on Dec. 15. Marshall, 55, faces a maximum sentence of five years in jail, mandatory restitution and a criminal forfeiture of at least $1 million.
The S.E.C. charges have to be settled separately.
by Elizabeth Olson
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