A former partner at Ernst & Young L.L.P., of New York, tipped a friend in the Philadelphia area about seven deals by clients in a $596,000, insider-trading scheme, according to charges filed yesterday by federal prosecutors.

The indictment, filed in New York, alleges that Donna Murdoch, a managing director at the Keystone Equities Group L.P., of Oaks, passed the information about pending acquisitions on to her father, her supervisor at Keystone Equities, and a friend.

Each of them used the information to make illegal profits by trading securities in the companies, according to a complaint by the Securities and Exchange Commission in U.S. District Court for the Southern District of New York.

Murdoch's attorney, Barry Pollack, said: "We have been talking to the U.S. Attorney's Office and the SEC about Ms. Murdoch's trades for quite some time and have presented them substantial evidence that she did not engage in insider trading. We're very disappointed that they have nonetheless decided to proceed with their case."

Pollack said Murdoch's court date had not yet been scheduled, but he expected it to be early next week.

The former Ernst & Young partner, James Gansman, was an adviser on human resources issues to acquiring firms and told Murdoch of deals that had not yet been announced, allowing her to personally profit by $392,035, federal officials said.

Gansman and Murdoch, who allegedly communicated more than 400 times by telephone and text messages about a deal for Freescale Semiconductor Inc. in 2006, were charged with one count of conspiracy to commit securities fraud and 11 counts of securities fraud. Each count of securities fraud carries a sentence of up to five years and a fine of up to $5 million.

"Mr. Gansman did not participate in any wrongful conduct whatsoever," his attorney, Barry Bohrer, told Bloomberg News. "He did not trade a single share nor make a penny . . . and was not aware that anyone had done so."

Federal authorities said Murdoch, 46, gave the insider information to her father, Gerald L. Brodsky, 71, who allegedly made $63,400 in illegal profit. Others made $140,760 in illegal profit, including $59,880 for Murdoch's supervisor, the SEC said.

Pollack said Murdoch's work at Keystone Equities had nothing to do with publicly traded companies.

A receptionist at Keystone Equities said by telephone that no company official was available to comment.

Murdoch lives in Malvern; her father lives in Narberth, according to the 30-page complaint.

In 1993, Brodsky pleaded guilty to one count of securities fraud in an unrelated matter. Brodsky could not be located yesterday.

The SEC is seeking injunctions against future violations of the federal securities laws, forfeiture of illegal trading profits with prejudgment interest, and civil penalties.

Read the civil suit filed by the SEC (.pdf) at

http://go.philly. com/ernst