U.S. ATTORNEY INDICTED IN INSIDER SCHEME
An attorney was named today in a
24-count federal indictment alleging he initiated an insider
trading scheme which allowed friends and relatives to make
nearly 1.5 mln dlrs in illegal profits on non-public knowledge
of a corporate restructuring.
    Israel G. Grossman, 34, who had been a pension specialist
for the New York firm of Kramer, Levin, Nessen and Kamin,
allegedly stole information from the firm involving the
recapitalization of Colt Industries Inc <COT> last July.
    Grossman, who was arrested February 17, allegedly enabled
three individuals whom he alerted to purchase 1,006 colt call
options for 33,938 dlrs.
    July 21, the day after the Colt recapitalization was
announced, its common stock rose almost 27 points. The options
increased to a value of about 1.5 mln dlrs, according to
Rudolph Giuliani, U.S. Attorney in Manhattan, who announced the
indictment today.
    Grossman is charged with 12 counts of mail fraid and 12
counts of securities fraud. If convicted, he could be sentenced
to a maximum of 120 years in jail and fined a total of six mln
dlrs.
    Grossman resigned from the law firm following his arrest.
He is scheduled to enter a plea March 26.
 Reuter
