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BOB MOON: An insider trading scandal with a twist was revealed today by federal attorneys and government regulators. The alleged schemes involved high-level employees at UBS and Morgan Stanley among other firms — and some of them are accused of blackmailing the inside traders. As Ashley Milne-Tyte reports, the participants allegedly profited by around $15 million.

ASHLEY MILNE-TYTE: The U.S. Attorney’s Office brought criminal charges against 13 people.

Chris Bebel is a former federal prosecutor.

CHRIS BEBEL: This is a very significant case in the sense that it strikes at the heart of key players within very prominent international securities firms.

In the UBS scheme, an executive director is accused of tipping off traders to impending stock upgrades in exchange for a share of the profits. One trader managed hedge funds.

James Cox of Duke University says hedge fund managers reap large rewards for being a step ahead.

JAMES COX: They have powerful incentives to try and do exactly what this case alleges occurred: find weak individuals within organizations who can be tempted to leak confidential information to give the hedge fund an edge.

He says insider trading is pretty pervasive. And with the attention today’s charges are getting, those who know about any dodgy dealings are now more likely to come forward.

COX: Somebody who’s conscience starts bothering them after awhile. Or fears that ultimately. they’ll be caught. And so if they come in early, they’ll get a lighter sentence.

He says we can expect more cases soon.

In New York, I’m Ashley Milne-Tyte for Marketplace.