Posts tagged 'Insider dealing'

Stevie Cohen, neutered (again)

The SEC just will not lay off this particular hedgie…

Washington D.C., Jan. 8, 2016 — The Securities and Exchange Commission today announced that hedge fund manager Steven A. Cohen will be prohibited from supervising funds that manage outside money until 2018 in order to settle charges for failing to supervise a former portfolio manager who engaged in insider trading while employed at his firm. In addition, Cohen’s family office firms will be subject to SEC examinations and the firms must retain an independent consultant to conduct periodic reviews of their activities to ensure compliance with securities laws. Read more

“Tamayo…chewed up or ate post-it notes or napkins after using them to show the stockbroker the ticker symbol…”

It happened (allegedly) below the clock, atop the information booth at New York’s Grand Central Station…

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The wonky, absurd scales of (insider dealing) justice

On Monday…

Mathew Martoma, the former SAC Capital portfolio manager who refused to co-operate with authorities targeting his old boss Steve Cohen, was sentenced to nine years in prison for insider trading on Monday. Sentencing guidelines indicated Mr Martoma, 40, could serve between 15 and 20 years in prison because of the size of the illicit profits.

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FCA 1.1 — Ian Charles Hannam 1

We feel sympathy for the FCA. But then, the hole in which it finds itself is of its own digging.

Consider the fresh news. Having spent eight months mulling over the evidence presented in Ian Hannam’s Upper Tribunal appeal against the regulator’s earlier imposition of a £450,000 fine for supposedly passing on inside information, the Upper Tribunal has concurred that Hannam did indeed breach the UK rulebook.

But as is gradually being realised, the rulebook itself is unworkable. It involves pursuing upright citizens for synthetic crimes. Read more

A move to monthly? Let’s hope not

James Surowiecki has written an eloquent piece in The New Yorker, which sadly also happens to be completely wrong-headed.

He’s tackled the vexed issue of insider dealing, which appears to be getting worse and worse, certainly in the US… Read more

Is the FSA (still) a leaky ship?

It may seem fanciful that Tidjane Thiam and other directors at Prudential believed that a leak of their planned $35bn takeover of AIA three years ago might come from the FSA. But they did. Here’s paragraph 4.6 from the final notice censuring Mr Thiam and fining the Pru $30m…

4.6. The directors of Prudential, including Mr Thiam, met on 31 January 2010 to be briefed on the proposed transaction by Credit Suisse. There was a consensus between the directors of Prudential at this meeting that:

(1) a leak was the key risk to the transaction;

(2) the FSA was one of a number of parties which might be the cause of a leak; and

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The GS Bank IC Buy Open List Options GS & Co c/o Zurich Office account mystery

There’s been a fierce and fascinating response from the SEC to evidence of clairvoyant dealings in Heinz ahead of news of the Buffett/3G Capital takeover offer. The statement is here and the full SEC complaint is here.

Following reports of unusual activity in Heinz call options on Nasdaq on Wednesday – the day before the Heinz news broke — the SEC has obtained an emergency order freezing assets in a Zurich, Switzerland-based trading account which it reckons benefited to the tune of $1.7m from the Buffett/3G bid. Read more

Insider crack down in Germany and…northern England


There is what looks to be a rather large insider dealing case breaking in Germany involving allegations that share prices may have been manipulated by the media. Snap from Bloomberg: Read more

Corporate responsibility, Swiss style

Stäfa (Switzerland), 30 March 2011 – In the run-up to the profit warning of 16 March 2011 the responsible persons at Sonova failed to issue a timely Sonova-internal black-out period for trading in Sonova shares and options. As a result of this failure, there were trades that should not have taken place during that period. In addition, Sonova has issued its profit warning too late.

These findings are the result of an investigation carried out by a law firm upon a mandate issued by the Board of Directors of Sonova. Read more

Big Brother is watching/listening/scoping

Related link:
FSA presses for crackdown on leaks to media – FT

Wyly brothers accused of MASSIVE insider scandal

Yes, MASSIVE. Knocks Martha Stewart, Galleon, etc into a cocked hat…

The Securities and Exchange Commission today charged brothers Samuel E. Wyly and Charles J. Wyly, Jr. of Dallas with violating federal securities laws governing ownership and trading of securities by corporate insiders. The Wyly brothers reaped more than $550 million in undisclosed gains while sitting on corporate boards by trading stock in those public companies through hidden entities located in foreign jurisdictions to conceal their ownership and trading of those securities.

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Crock regulation

From Britain’s financial regulator on Tuesday (translation ours):

The Financial Services Authority has fined David Jones, former finance director (FD) of Northern Rock PLC (NR) five bob and given him a spank.

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FSA chief warns on insider dealing

The shake-up of financial regulation could undermine the UK’s tougher approach to insider dealing and customer mistreatment, says the head of the Financial Services Authority, the FT reports. “We must not return to an era where supervisors are reluctant to engage with the enforcement process,” Hector Sants, the watchdog’s chief, told a conference on enforcement on Tuesday.

FSA is ‘losing’ war on insider dealing

Some 60 per cent of the members of the Chartered Institute for Securities & Investment Institute responding to a survey on whether the Financial Service Authority was winning the war on market abuse said the regulator’s actions had failed to make serious inroads against financial wrongdoing, the Telegraph said.

Introducing SocGen’s ‘leak-o-meter’

Intriguingly, analysts at Societe Generale reckon they can detect insider dealing – and save quant investors money in the process. FT Alphaville has the details.
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FSA probe targets trades in S&N deal

The UK’s largest-ever investigation into insider trading in the City centres on interlinked chains of individuals allegedly making as much as £20m from dealing in the shares of a number of companies, the FT said, citing people familiar with the FSA’s investigation. Trades under investigation include activity in shares of Scottish & Newcastle during its takeover by Heineken and Carlsberg in late 2007. The FSA suspects the ring made some £4.1m by trading in S&N shares during its £7.8bn takeover by rival brewers.

Welcome to the brave new world of insider trading investigations

Listen up hedgies, traders and investment bankers: you are being very closely watched indeed.

Regulators on both side of the Atlantic appear to have adopted a shock-and-awe campaign as far as cracking down on insider trading is concerned. Read more

FSA probe said to focus on front-running

The insider dealing investigation announced by the UK’s Financial Services Authority earlier this week is said to focus on the possible front-running of block-trades, Bloomberg News reports, citing an unidentified person. The FSA is looking into whether any of the seven individuals arrested in its investigation, used knowledge of imminent large-scale securities sales to make a profit.

So who is Julian Rifat?

FT Alphaville asks the question after the Financial Services Authority’s Tuesday dawn raids on Deutsche Bank, BNP Paribas and Moore Capital. Traders were abuzz with speculation as to the identities of six men arrested in a joint operation by the UK financial services regulator and the Serious Organised Crime Agency (SOCA). While the FSA and SOCA were both tight-lipped about the names and affiliations of the men involved, some of this information has finally come to light.

FSA dawn raids rock City institutions

Deutsche Bank, BNP Paribas and Moore Capital, were on Tuesday embroiled in the UK’s biggest insider dealing case yet after dawn raids at 16 locations led to the arrests of six people. More than 140 officers from the FSA swooped on premises across London and the south-east, seizing documents and computers from the three institutions. Three City professionals, including senior executives at Deutsche and BNP and a trader at Moore Capital, were among those arrested on suspicion of being involved in what the FSA called a “sophisticated and long-running” insider dealing ring.

Who is Julian Rifat?

Early on Tuesday morning in London, traders were abuzz with speculation as to the identities of six men arrested in a joint operation by the UK’s regulator and the Serious Organised Crime Agency (SOCA).

While the UK’s Financial Services Authority (FSA) and SOCA were both tight-lipped about the names and affiliations of the men involved, some of this information has finally come to light. Read more

Wasteful, useless (UK) regulation, Part 93

It’s almost as if Hector Sants got a box set of The Wire for his birthday, thought that guy McNulty looked a bit like him (in his younger days) , and then this Galleon stuff came up and now

March 18 (Bloomberg) — Traders’ mobile-telephone calls may be taped in an effort to stamp out insider trading, according to proposals from the U.K. financial regulator.

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FSA seeks extradition first

The Financial Services Authority is, for the first time, seeking the extradition of suspects from abroad to face criminal charges in the UK as it looks to step up efforts to crack down on malpractice in financial markets. The regulator has charged senior investment banker Christian Littlewood, who has worked at Shore Capital and Dresdner Kleinwort, and his wife Angie Littlewood, with 13 counts of insider dealing and one count of conspiracy to commit insider dealing. The pair have been bailed to appear at court on April 6.

Insider dealing reaches the Comoros Islands

A Mayotte link in the latest market abuse scandal to emerge in the UK. Read more

Streaky’s guilty, and he is going down (updated)

Via Bloomberg:


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Streaky’s guilty, but will he go down?

The case against Malcolm Calvert – that he indulged in the crime of buying shares while in the possession of inside information – has been followed with keen interest across the City of London.

Not least because Calvert (Streaky to his friends) is a former Cazenove partner. A blue blood gone bad, the FSA said. Read more

That Heritage/Genel deal (updated)

When Heritage Oil terminated its $6bn plan to merge with Turkish company Genel Enerji in November we were treated to the following explanation:

Following entry into the LOI [Letter of Intent] with Eni, and in light of the continuing situation in Kurdistan where, in particular, the revenue payment mechanism for oil exports has not yet been established, discussions with Genel have been terminated.  Read more

Ironic chart du jour

Here’s the S&P 500 regional banks index versus the old skool S&P “investment banks” barometer (consisting of Goldman, MOST, Charles Schwab and E-Trade).

Guess which is which? Read more

Rajaratnam faces a fresh raft of insider charges

US prosecutors said on Tuesday they planned a huge expansion in insider trading charges against Raj Rajaratnam, and accuse the billionaire founder of the Galleon hedge fund group of making at least $36m in illicit profits – more than twice the amount originally alleged. The new claims were made in court documents filed by prosecutors in opposition to Mr Rajaratnam’s second request to reduce his $100m bail bond. Indicted last month in one of the biggest insider trading cases in history, he has denied any wrongdoing. Prosecutors now allege that between March and July 2006, Mr Rajaratnam obtained non-public information about AMD’s acquisition of ATI Technologies “from an inside source to whom Rajaratnam had begun making large payments in exchange for insider information in or about 2004”.

The Galleon index

Wall Street, as anyone familiar with the failure of Long Term Capital Management will know, treats a teetering hedge fund as carrion crows do a wounded animal.

And with Galleon investors rushing to withdraw money from the scandal hit fund (the WSJ reports about $1.3bn of its $3.7bn of assets having been pulled) the feeding frenzy has begun. Read more