Feds Charge 14 in Insider Scheme

Collotta quit her position at Morgan Stanley in mid-2005 before the investigation began.

In October, TheStreet.com first reported that the SEC was looking into whether UBS was involved in improperly providing advance notice of upcoming changes in analyst stock recommendations.

"The ringleaders of the UBS part of the scheme went to great lengths to hide their illegal conduct, first through a clandestine meeting at Manhattan's famed Oyster Bar and eventually the use of disposable cell phones, secret codes and cash kickbacks before the scheme unraveled," the SEC says.

The SEC is seeking "permanent injunctive relief, disgorgement of illicit profits with pre-judgment interest and the imposition of civil monetary penalties."

The investigation at UBS comes three years after 10 big Wall Street firms, including UBS, paid $1.4 billion in fines to settle allegations that research analysts conspired with investment bankers to issue favorable ratings on stocks. The research settlement tarnished the reputation of Wall Street stock research and gave analysts a black eye.

UBS is "assisting the authorities to the fullest extent possible in their investigation into the alleged actions of a single UBS employee," according to a company statement. "UBS is committed to safeguarding the integrity of its proprietary information and has rigorous procedures in place to avoid any theft or misuse. Any violation of these procedures is taken extremely seriously."

A Morgan Stanley spokesman said the firm has "cooperated and are continuing to cooperate with authorities regarding a former employee who allegedly stole information."