Posts tagged 'Insider Trading'

Reminder: Please complete your Annual Risk Awareness Test

This is another reminder about completing your Annual Risk Awareness Test. Our records show that you have yet to complete the Insider Trading Module.

Please note — for like the 30th time or something — that completion is mandatory. You must complete the test by Friday, October 4th. Read more

The SEC vs Scott London

What moves people to give out insider trading tips?

That’s the allegation which the SEC has levied at Scott London, the former KPMG partner embroiled in a scandal over audits of companies including Herbalife and Skechers.

Here’s the full 17-page civil complaint (also alleging that Bryan Shaw used London’s info to trade shares): Read more

SAC settles for $600m

Washington, D.C., March 15, 2013 — The Securities and Exchange Commission today announced that Stamford, Conn.-based hedge fund advisory firm CR Intrinsic Investors has agreed to pay more than $600 million to settle SEC charges that it participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug being jointly developed by two pharmaceutical companies…

That’s the largest insider trading settlement ever. And is more than Goldman paid to settle Abacus. Read more

SEC v CR Intrinsic

“This is an insider trading case where affiliated investment advisers and their hedge funds made over $276m in illegal profits…”

Click for the full SEC civil complaint against CR Intrinsic, hedge fund manager Mathew Martoma and neurology professor Dr Sidney Gilman: Read more

Mizuho’s love triangle found 33% guilty

So they’re innocent. Really.

Yes, really. From Bloomberg:

Two girlfriends of former Mizuho International Plc investment banker Thomas Ammann were found not guilty of illegally trading on tips from him about Canon Inc.’s acquisition of OCE NV.

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Probably not cool: getting inside info via your recovery buddy

Dear readers,

Okay, seems some of you didn’t especially like Paul’s take on the FSA’s “charades” inside information case on Tuesday. Well the SEC has laid charges over an alleged insider trading case that we can all get behind (if it turns out to be correct, of course). Read more

Gekko latest: I am fictional

Well, some people do confuse “tutorial” and “satire” in Wall Street, Liar’s Poker etc

As the FT’s Kara Scannell reports on Monday, Michael Douglas is doing anti-insider trading PSAs for the Feds. Here’s a taste: Read more

Bachus faces insider trading inquiry

The chairman of the House Financial Services Committee is being investigated over possible violations of insider trading laws, the Washington Post reports. The Office of Congressional Ethics began the probe into trades by Rep. Spencer Bachus late last year. Bachus made a slew of stock options bets in 2008, executing the trades around major policy decisions over the financial crisis, the WSJ says. House Representatives have just passed Stop Trading on Congressional Knowledge Act to improve financial disclosures by politicians, the WSJ adds.

House passes curbs on insider trading

The US House of Representatives on Thursday overwhelmingly passed new curbs on insider trading by lawmakers and other government officials despite complaints from Democrats and some Republicans that key anti-corruption provisions were dropped, reports Reuters. The legislation, aimed at ensuring lawmakers do not profit from non-public knowledge they gain through their positions, is the most extensive effort to clamp down on Congress’ personal business dealings in years. Lawmakers have seized upon it amid approval ratings that continue to plumb new lows. The House bill did not include a Senate-passed plan to impose new regulations on Washington insiders who collect “political intelligence” about pending legislation from lawmakers and their aides and sell it to Wall Street. It also lacked Senate proposals to equip prosecutors with new legal tools to pursue public corruption cases and ban all gifts to public officials valued over $1,000. The WSJ says the bill picked up unexpected support from some lawmakers who actively trade stocks.

Senate passes insider trading bill

Senators have voted overwhelmingly to pass the Stop Trading On Congressional Knowledge Act, a bill to remind legislators that insider trading is illegal, the WSJ reports. Abysmal approval ratings inspired the Senate into action, especially after media coverage questioning stock trading by its members, the Associated Press (via the Washington Post) says. The STOCK Act will require public disclosure of recent securities trades. Current insider-trading laws probably cover Congress, but an explicit confirmation within legislation would be helpful, SEC officials have previously said.

Seven charged over $62m insider trading

Seven hedge fund portfolio managers and analysts have been charged in a $61.8m insider trading scheme as US authorities escalate their crackdown on Wall Street corruption, writes the FT. Agents with the Federal Bureau of Investigation arrested three hedge fund managers in New York, Boston and Los Angeles on Wednesday morning. According to the unsealed complaint, the “circle of friends” once worked together at other investment firms and swapped information about Dell’s first and second quarter 2008 earnings and other technology companies in exchange for tips and cash payments. The criminal charges highlight how US prosecutors and the FBI are escalating their investigation into insider trading, dubbed “Perfect Hedge” and the probe is expected to lead to charges against other individuals, people familiar with the matter say. The Securities and Exchange Commission also filed civil fraud charges on Wednesday. The WSJ journal reports that investigators have enlisted the help of an extensive range people, including those employed at various money managers, as the scope of investigations has widened.

All Know Holdings vs SEC

Securities and Exchange Commission Civil Action No 11 CV 8605.

Presented without comment, obv. Read more

Introducing the Keep America Safe Job-Creating Congress ETF

CBS’ flagship 60 minutes programme carried a feature Sunday night that looked at whether Congressmen have been trading stocks based on insider information. It’s a theme that’s been well covered in the blogosphere but last night it reached prime-time.

CBS didn’t allege any illegal behaviour — Congressmen aren’t subject to the same legal rules around the use of material non-public information as the rest of us — but it did refer to circumstantial evidence that members of the House may have taken advantage of confidential information they received. Read more

SEC takes another crack at Gupta (and Rajaratnam)

The newly released SEC and FBI complaints against Rajat Gupta detail the alleged evidence of insider trading by the ex-McKinsey boss.

As the FT suggested Wednesday morning, Buffett’s investment in Goldman Sachs forms a key part of both cases, along with two other alleged instances relating to the bank, and a further two relating to Procter & Gamble, where Gupta was also a board member. Read more

Gupta to face charges over Goldman data

Rajat Gupta, the former head of McKinsey, will face criminal charges as soon as Wednesday for allegedly passing Goldman Sachs earnings data to Raj Rajaratnam, the hedge fund manager, while serving on the bank’s board, the FT reports, citing people familiar with the matter. Mr Gupta is expected to voluntarily surrender to Federal Bureau of Investigation agents on Wednesday morning, these people say, with the charges expected to be announced by US prosecutors in Manhattan. Gary Naftalis, attorney for Mr Gupta, said any allegation that Mr Gupta engaged in any unlawful conduct was “totally baseless”. Mr Naftalis said Mr Gupta did not trade in any securities, did not tip Mr Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo. Some of the key evidence in Rajaratnam’s trial included wiretapped phone conversations where the two men discussed details gleaning from Goldman board meetings, Forbes reports. It was also alleged by prosecutors that Gupta had given Rajaratnam details of Berkshire Hathaway’s $5bn investment in the bank.

 

SAC Capital referred for “unusually prescient” trades

The WSJ has got its hands on a list of the 18 “well-timed” SAC Capital trades referred by Finra or its predecessor NASD to the SEC between 2002 and 2011:

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Chaat, ola leaves and the curious case of Raj Rajaratnam

Raj Rajaratnam has given his first interview since being sentenced to 11 years in prison for insider trading. Like the trial itself, it’s an odd mix of money, family, cop cliches and immigrant networks.

There’s some astrological claptrap thrown in, too. Read more

Raj Rajaratnam sentenced to 11 years for insider trading

On 11 May former Galleon boss Raj Rajaratnam was convicted on all 14 counts of alleged securities fraud and conspiracy. He was in court in New York on Thursday to receive his sentence:

RTRS – US JUDGE SAYS INTENDS TO SENTENCE FUND MANAGER RAJ RAJARATNAM TO 11 YEARS IN PRISON FOR INSIDER TRADING – COURT HEARING Read more

Soros fails to quash insider trading conviction

George Soros, the billionaire hedge fund manager, has lost a case at the European Court of Human Rights to have his criminal conviction for insider dealing quashed, the FT reports. The failed appeal at announced in a 4-3 decision the Strasbourg-based court is the latest twist in a nine-year battle by the 81-year-old Mr Soros to clear his name following his conviction in France in 2002. The French criminal case hinged on trades that the Hungary-born investor had executed 14 years earlier in the stock of Société Générale that reaped his hedge fund, the Quantum Fund, $2.9m in profits.

SEC extends probe into US ratings cut

The SEC has issued subpoenas to hedge funds and other trading firms as part of its investigation into possible insider trades before S&P cut its US credit rating from AAA, the WSJ reports. The probe is focused on stock market trading in advance of the ratings decision. The subpoenas’ terms were unusually broad, people familiar with the matter said. The SEC will however face a challenge ascribing bearish trades to the S&P downgrade given widespread concerns over a global downturn and European debt at the time of the ratings cut, as well as tracking trades through options and ETFs.

Former Primary Global manager faces trial

A former Primary Global sales manager is set to go to trial on Wednesday defending allegations that he was part of an insider trading scheme that matched hedge fund clients with company insiders, according to the FT. James Fleishman’s trial is the latest step in a government crackdown on insider trading that has seen 52 people charged in two years, all but three of whom have pleaded guilty or been convicted at trial. The case will also showcase expert network firms, a bugbear of recent prosecutions, while prosecutors are likely to draw on extensive wire-tapping of phone calls between Fleishman and experts, NYT Dealbook reports. Wiretaps were critical in bringing a conviction in the recent Raj Rajaratnam insider trading case.

Hefner son-in-law settles Playboy case

The son-in-law of Hugh Hefner, founder of Playboy Enterprises, has been sued by the US Securities and Exchange Commission for allegedly trading shares based on secret information he learnt from his wife, the magazine publisher’s long-time chief executive, the FT reports. William Marovitz, who is married to Mr Hefner’s daughter Christie, agreed to pay $168,352 in disgorgement, interest and penalties to settle the civil fraud case. He neither admitted nor denied wrongdoing. According to the SEC, Mr Marovitz made more than $100,000 in profits and avoided losses by trading Playboy stock ahead of earnings announcements, takeover news and a stock offering from 2004 to the end of 2009. Ms Hefner was chief executive of Playboy from 1998 until she retired in 2009. Mr Marovitz is a lawyer and former Illinois state senator.

Gupta allowed to pursue lawsuit against SEC

Rajat Gupta, the former head of McKinsey & Co accused by the SEC of insider trading, has been given the green light to pursue legal action against the regulator for singling him out unfairly, the FT reports.  In March, the SEC filed an administrative proceeding alleging that Mr Gupta engaged in insider trading by tipping Raj Rajaratnam, convicted founder of hedge fund Galleon Group, with secret information about Goldman Sachs and Procter & Gamble while serving on the boards of both companies. Mr Gupta, who denies engaging in insider trading, sued the SEC, alleging that the regulator violated the equal protections clause of the US constitution by suing him administratively when other Galleon defendants were sued in federal court. US Judge Jed Rakoff, an outspoken critic of the SEC at times, on Monday denied the SEC’s motion to dismiss Mr Gupta’s lawsuit, saying it could move forward on an expedited basis. He chastised the SEC in his 22-page opinion, saying it had engaged in a “seeming exercise in forum shopping” by choosing to file the case in its “home court”. The case is one of the more remarkable to emerge from a federal crackdown on insider trading, the Washington Post says.

Wall Street crime, New Yorker edition

George Packer has written nearly 11,000 words on financial crime for this week’s New Yorker. Like most New Yorker articles, it’s an exercise in curious ambivalence and worth a read if you have a spare half hour. (Although we still prefer Packer’s essay on the absurdity of the US Senate.)

The essay has two narratives disguised as one. First, a play-within-a-play account of the Galleon trial, featuring an interview with Preet Bharara, the US Attorney for the Southern District of New York. Second, a reflection on what this trial tells us about insider trading more widely, and the lack of financial crisis prosecutions. Or, why it’s all Grisham and no Taibbi. Read more

Swiss probe Synthes shares trade

Swiss officials are looking into unusual trading activity in medical-devices manufacturer Synthes before it was acquired for $21.3bn by Johnson & Johnson in April, the WSJ reports. People familiar with the situation said officials at SIX, the Swiss stock exchange, were examining a spike in Synthes’ shares before the deal was announced. If evidence of insider trading is found, the case could be referred to the Zurich’s prosecutor.  Both companies and SIX declined to comment.

Ex-Galleon trader ‘Octopussy’ convicted

Zvi Goffer, a former Galleon Group trader nicknamed Octopussy, and two others have been found guilty of insider trading, handing the US government another conviction in its expansive probe into corruption on Wall Street, the FT says. Goffer stood trial with his brother Emanuel Goffer and Michael Kimelman, a former trader, accused of trading ahead of corporate takeover announcements of which they learnt from two Ropes & Gray lawyers advising the companies on the deals. Author Joe Nocera at the New York Times asks why Galleon investors have “been able to keep every ill-gotten penny.”

Suspicious pre-deal trades fall sharply

The level of suspicious trading ahead of UK mergers and acquisitions fell sharply last year to 21 per cent, the lowest level since 2003, the FT reports. Last year, timely trades – defined as abnormally large share price movements in a company in the two days before a regulatory announcement – preceded 25 of 118 UK-announced deals. That was down almost one-third from the past four years, when the level hovered around 30 per cent. The fall comes as the FSA has increased its efforts to detect, prosecute and punish such trades.

SAC faces probe of biotech trading

SAC Capital Advisors, one of the nation’s most successful hedge funds, is a focus of an SEC investigation into whether traders used inside information to profit from the $15bn takeover of biotechnology firm MedImmune in 2007, the Wall Street Journal reports, citing people familiar. The probe is part of a broad SEC inquiry into trading by various hedge funds, including SAC and its affiliated funds, in stocks connected to some of the biggest health-care deals of the past decade. SAC is facing two other inquiries into its trading activities: by federal prosecutors in New York and by Iowa Senator Charles Grassley.

Ex-Nasdaq executive pleads guilty

A former Nasdaq executive pleaded guilty to making more than $640,000 in illegal profits by trading on secret company information he learnt while employed on the US exchange’s market intelligence desk, the FT reports. Donald Johnson, 56, was a managing director at Nasdaq’s market intelligence desk, which gave him access to sensitive information, such as earnings, executive changes and drug trial results before they were announced. Until he retired in September 2009, prosecutors say, Mr Johnson helped companies anticipate how their stock prices would react based on their news. Authorities allege that Mr Johnson, from a work computer, logged on to an online brokerage account in his wife’s name eight times between 2006 and 2009 and traded stocks after receiving the non-public company information.

Insider trading is definitely the new black

Bit of a stunner from the SEC on Thursday (emphasis ours throughout):

Washington, D.C., May 26, 2011 The Securities and Exchange Commission today charged a former managing director of The NASDAQ Stock Market with insider trading on confidential information that he stole while working in a market intelligence unit that communicates with companies in advance of market-moving public announcements. Read more