(Bloomberg) Former Citigroup Inc. stockbroker Ralph Casbarro was fined $500 and received no prison sentence or probation for his involvement in a scheme to let day traders eavesdrop on internal conversations over brokers' "squawk boxes."

Casbarro, 48, was fined today by U.S. District Judge I. Leo Glasser in Brooklyn, New York. He pleaded guilty in 2005 to one count of conspiracy to commit securities fraud. Casbarro was fired by Citigroup before being indicted.

"I know what I did was wrong without a shadow of a doubt and I'm sorry for it," Casbarro told the judge.

Kenneth Mahaffy Jr., a former broker at Merrill Lynch & Co. and Citigroup, and five co-defendants were found guilty in the case in April 2009. In July, they lost a bid to have their convictions tossed because they say prosecutors hid evidence of their innocence.

Two of Mahaffy's co-defendants who went to trial are former brokers and the three others are former day-trading executives at New York-based A.B. Watley Group Inc.

Casbarro accepted bribes from day traders in return for allowing them to hear Citigroup customer orders. Squawk boxes are internal intercoms used by brokers to discuss pending trades by their banks. The day traders were accused of using information overheard on the intercoms to trade shares ahead of larger institutional transactions.

Casbarro would call day traders at A.B. Watley and leave his phone off the hook next to the squawk box, according to prosecutors.


After pleading guilty, Casbarro was barred from associating with any broker or dealer by the Securities and Exchange Commission. He cooperated with the government in the criminal case, though he didn't testify at trial, according to prosecutors.

"He early on recognized that he had broken the law and pleaded guilty five years ago," Casbarro's lawyer, Lawrence Iason of Morvillo Abramowitz Grand Iason Anello & Bohrer, said at the hearing today. "He has extensively cooperated with the government."

The government agreed to dismiss its case against another co-defendant, former A.B. Watley Chief Operating Officer Michael Picone, in return for his cooperation with prosecutors, U.S. District Judge Jack B. Weinstein said at a January 2009 hearing. Picone didn't admit to any wrongdoing.

The case is U.S. v. Mahaffy, 05-cr-00613, U.S. District Court, Eastern District of New York (Brooklyn).