Ex-Morgan Stanley exec convicted in stock loan scheme

The mania-like urge to short stocks last year led to some big shortages in borrow-able stocks and created a shady cottage industry aimed at filling the need. Stock-loan finders sought to help the broker dealers locate inventories of a stock and match borrowers and lenders.

Darren DeMizio, formerly of Morgan Stanley, has just been convicted of fraud and faces 25 years for his role in a scheme in which many traders took kickbacks from finders, Reuters reports. DeMizio was said to have directed Morgan Stanley stock-loan business to two finders in exchange for kickbacks paid to his brother and father. In 2000-2004, such payments amounted to $1.6 million. So far, 28 individuals, including DeMizio's brother, have pleaded guilty.

For more:
- here's the Reuters article

Related Articles:
Sarbox and financial statement fraud
The big mystery in the Madoff case
Big run on Antigua bank; Stanford whereabouts unknown
The hunt for fund manager Nadel is on