Archive for the ‘USA & Canada’ Category

Swiss trader to pay $2.8m to settle insider trading charges / Martin

17/06/2015. | This post has no Comments

The Securities and Exchange Commission today announced that a Basel based Swiss trader has agreed to pay more than $2.8m to settle charges that he traded on nonpublic information ahead of a Florida-based biometrics company’s acquisition by Apple Inc.

An SEC investigation unearthed evidence that Helmut Anscheringer purchased stock and call options in AuthenTec Inc (which provides fingerprint sensors and software for use in electronic devices) having learnt from a friend related to an AuthenTec executive that Apple proposed to buy the company.

The call options accounted for nearly all of the series volume on the days he purchased them. Just days later, AuthenTec publicly announced that it had agreed to become a wholly-owned subsidiary of Apple for $355m in cash. The positive news led to the stock price closing approximately 60% higher than the previous day. Through his unlawful trading, Anscheringer garnered more than $1.8m in illicit profits.

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Accountant and son charged in $1.1M Insider Trading Scheme / Siim

15/05/2015. | This post has no Comments

The Securities and Exchange Commission charged a CPA and his son in New York on Thursday, accusing them of conducting an insider trading scheme involving tips on nonpublic information that they sent in coded email messages disguised as discussions about golf.

The SEC alleges that Sean R. Stewart, who is currently a managing director at a prominent investment bank, routinely tipped his father Robert K. Stewart with confidential information about future mergers and acquisitions involving clients of two investment banks where he has worked during the past few years.

The elder Stewart, who is a CPA as well as the CFO of a technology company, allegedly cashed in on the tips by placing and directing highly profitable securities trades ahead of at least a half-dozen merger and acquisition announcements.  The scheme generated approximately $1.1 million in illicit proceeds in a four-year period.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against the Stewarts.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Robert Stewart recruited a trading partner to help him hide his illegal trading and the connection to his son as the source of the nonpublic information about investment bank clients.  Trades were conducted in the partner’s account, and the illicit profits were shared in the form small cash payments to Robert Stewart to avoid creating a clear paper trail of the kickbacks.  They also spread trades over numerous stock options series in an attempt to avoid raising red flags with regulators.

“Serial insider traders assume a huge risk that we will detect their pattern of trading and connect them to their source of confidential information,” said Daniel M. Hawke, chief of the SEC Division of Enforcement’s Market Abuse Unit.  “We have integrated new technological tools to quickly and easily identify relationships among traders and spot suspicious trading across multiple securities.”

According to the SEC’s complaint, there were additional ways the elder Stewart and his fellow trader attempted to conceal the scheme and evade detection when sharing nonpublic information obtained from Sean Stewart about investment bank clients.

They primarily met in-person or used coded e-mail messages to discuss the scheme and trading plans.  Among examples of e-mail text using golf terminology were “saw local story about high cost of golf reservations since a foreign company purchased all- even more expensive than imagined” and “might have an opportunity to play golf- but would need to book the reservation as soon as the office opens Tuesday morning.”

The SEC’s complaint charges Robert and Sean Stewart with violations of the antifraud provisions of the federal securities laws.

Robert Stewart was arrested on conspiracy and insider trading charges this morning at his home in North Merrick, Long Island. Sean Stewart surrendered to the FBI on the same charges in Middleton, Wis., and is expected to appear in Manhattan federal court on Monday.

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New York broker sentenced in $37M insider trading scheme / Martin

08/02/2012. Tags: , , , , , | This post has no Comments

A former mortgage broker was sentenced Tuesday to 2 1/2 years in prison for being the middleman in a $37 million insider trading scheme that federal authorities said was one of the longest-running ever uncovered.

Kenneth Robinson’s sentencing in U.S. District court came a day after his two co-conspirators received far lengthier sentences for their role in the 17-year conspiracy.

Former attorney Matthew Kluger, of Oakton, Va., received 12 years, the longest sentence ever handed down in an insider trading case. Former New York stock trader Garrett Bauer received nine years.

The three men admitted using advance information on company mergers provided by Kluger. Robinson, 46, of Long Beach, N.Y., knew both men separately and provided the connection between them.

Kluger admitted passing the information to Robinson, who gave it to Bauer. The trio made an estimated $37 million on trades from 2006 to 2011, according to court documents, which included $11 million on Oracle’s acquisition of Sun Microsystems in 2009.

Bauer’s attorney said in court Monday that his client made a profit of $22 million to $25 million when losses and taxes were factored in.

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FSA fines two more over Greenlight insider trading after David Einhorn / Siim

03/02/2012. Tags: , , , , , , , , | This post has no Comments

The Telegraph writes that two more individuals connected to US hedge fund Greenlight Capital have been fined over a multi-million pound insider-dealing case.

The City regulator fined Alexander Ten-Holter, Greenlight’s compliance officer, £130,000 and JP Morgan trader Caspar Agnew £65,000.

Both individuals were censured for failing to either identify or ask questions about Greenlight’s trading in Punch Taverns. The hedge fund sold significant tranches of Punch shares knowing the company was about to raise money, a move almost certain to drive Punch’s shares down.

Despite being told by a Greenlight analyst that the hedge fund had just spoken to Punch management and knew “secret bad things”, Mr Ten-Holter “took no steps to satisfy himself that the order was not based on inside information,” according to the FSA.

The regulator said Mr Agnew also became aware that Greenlight may have been trading on inside information but failed to act. Mr Agnew said he thought Greenlight was just “fortunate” in its timing.

Greenlight founder David Einhorn was fined £7.2m together with his fund for insider dealing. The fine’s size and action against the compliance officer shows a ramping up of FSA enforcement.

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Galleon Chief Rajaratnam Sentenced to 11-Year Term in Insider Case / Mait

14/10/2011. Tags: , , , , , | This post has no Comments

New York Times writes about the fallen hedge fund billionaire Raj Rajaratnam received the longest prison sentence ever for insider trading on Thursday, capping an aggressive government campaign that has ensnared dozens and may help deter the illegal use of confidential information on Wall Street.

Judge Richard J. Holwell of Federal District Court in Manhattan sentenced Mr. Rajaratnam, 54, the former head of the Galleon Group hedge fund, to 11 years in prison. A jury convicted Mr. Rajaratnam of securities fraud and conspiracy in May after a two-month trial.

“Insider trading is an assault on the free markets,” said Judge Holwell, who also imposed a $10 million fine and ordered Mr. Rajaratnam to forfeit $53.8 million in ill-gotten profits. “His crimes reflect a virus in our business culture that needs to be eradicated.”

The sentence was a watershed moment in a two-year push by federal prosecutors. Over that period, Preet S. Bharara, the United States attorney in Manhattan, has brought charges against 54 people with insider trading crimes. Of those, 50 have been either pleaded guilty or have been convicted at trial. Three others’ situations are pending, and the fourth is a fugitive.

Yet the crackdown on insider trading — a crime whose victims are not always apparent — has come at a time when many Americans have questioned why authorities have not pursued charges against bank executives over their role in the financial crisis, which still weighs on the economy.

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SEC Charges Former Goldman Sachs Employee and His Father with Insider Trading / Martin

23/09/2011. Tags: , , , , | This post has no Comments

The Securities and Exchange Commission today charged a former Goldman, Sachs & Co. employee and his father with insider trading on confidential information about Goldman’s trading strategies and intentions that he learned while working on the firm’s exchange-traded funds (ETF) desk.

The SEC’s Division of Enforcement alleges that Spencer D. Mindlin obtained non-public details about Goldman’s plans to purchase and sell large amounts of securities underlying the SPDR S&P Retail ETF (XRT). He tipped his father Alfred C. Mindlin, a certified public accountant. Father and son then illegally traded in four different securities underlying the XRT with knowledge of massive, market-moving trades in these securities that Goldman would later execute.

The case marks the SEC’s first insider trading enforcement action involving ETFs.

“With his father’s helping hand, Spencer Mindlin exploited his inside knowledge of Goldman’s complex hedging strategies to line his own pockets,” said George S. Canellos, Director of the SEC’s New York Regional Office.

Sanjay Wadhwa, Associate Director of the SEC’s New York Regional Office and Deputy Chief of the Market Abuse Unit, added, “We are aggressively working to identify and prosecute illegal insider trading across multiple markets and derivatives products regardless of the complexity of the trading pattern that we have to unravel in our investigations.”

According to the SEC’s order instituting proceedings against the Mindlins, the insider trading occurred in December 2007 and March 2008. Goldman was the largest institutional holder of the XRT in order to allow its customers to short the XRT. To hedge its long position in the XRT, Goldman shorted the individual securities underlying the XRT.

The SEC’s Division of Enforcement alleges that by virtue of his position on Goldman’s ETF desk, Spencer Mindlin knew Goldman’s current nonpublic position in the XRT and Goldman’s nonpublic plans to trade large amounts of securities underlying the XRT in order to hedge its position in the XRT. Spencer and Alfred Mindlin began purchasing and selling the four individual securities underlying the XRT within months after Spencer Mindlin joined Goldman’s ETF desk. They placed almost all of their trades in a brokerage account in the name of another family member. Spencer Mindlin failed to disclose his and his father’s trading to Goldman.

According to the SEC’s order, Spencer Mindlin learned on multiple occasions about Goldman’s trading intentions through e-mail communications he received shortly before he and his father placed their trades. In one instance when Alfred Mindlin phoned TD Ameritrade to upgrade the family member’s account to allow for the trading of options, he received a call on another line from Spencer Mindlin while on hold with the TD Ameritrade representative. Because the TD Ameritrade call was recorded, Spencer and Alfred Mindlin’s conversation discussing a trade was captured on tape. In later instances, Spencer Mindlin impersonated his father on at least four calls to TD Ameritrade. On one call, he instructed the firm not to execute a trade too early in the day because this would “chew into my profit – my profit on this trade.” The Mindlins obtained at least $57,000 in illicit profits through their insider trading.

The SEC’s Division of Enforcement alleges that by engaging in the misconduct described in the SEC’s order, the Mindlins willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The proceedings will determine what relief, if any, is in the public interest against the Mindlins, including disgorgement of ill-gotten gains, prejudgment interest, financial penalties, and other remedial relief.

Disney employee caught selling inside information / Mait

27/05/2010. Tags: , , , , , , | This post has no Comments

The Money Times wrote about another inside information case, but rather different this time.

A Walt Disney Co. administrative assistant and her boyfriend were caught trying to sell inside information regarding the company’s earnings. Both of them were arrested Wednesday morning in Los Angeles.

Walt Disney Co.’s head of corporate communications, Zenia Mucha’s assistant Bonnie Hoxie and her boyfriend Yonni Sebbag plotted to sell confidential Disney information to investment companies. The duo sent out mails to about 33 companies, including hedge funds, offering to share Disney’s quarterly earnings report with them in exchange of money.

Releasing Disney’s confidential information

“Hi, I have access to Disney’s (DIS) quarterly earnings report before its release on 05/03/10,” read the letter, sent Mar 5. “I am willing to share this information for a fee that we can determine later.”

The United States attorney for the Southern District of New York has charged the two with conspiracy and wire fraud. Hoxie, 33, and Sebbag, 29, could face up to 25 years in prison and a $250,000 fine, if convicted on all charges.

A federal judge released Hoxie on a $50,000 bond but ordered that Sebbag must be held as a potential flight risk. The U.S. Securities and Exchange Commission has also sued the two.

Read the whole story >

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