insider-trading

Remember the group of old high school buddies, who put Colonia High Class of ’88 on the map when they were criminally and civilly prosecuted for an “insider trading scheme focused on pharmaceutical and medical technology stocks”? They’ve all received punishments that range from fines to prison time and that’s in spite of the fact that:

  • The phrase “I have some vacation pictures for you” was a cover for payments made to tippers
  • Deals were referred to in code as the “Fat Man,” while updates on the statuses of deals were communicated with lines like “fat man has a friend” and “fat man walks alone”
  • One of the men assured everyone that even if the Securities and Exchange Commission did catch on, they wouldn’t have the resources to do anything about it. (To wit: “The SEC’s got to pick their battle because they have a limited number of people and huge numbers of investors to go after.”

And yet! Read more »

  • 17 Jun 2014 at 3:23 PM

Civil Penalty Watch ’14: Rajat Gupta

Ex-Goldman Sachs board member Rajat Gupta reported to prison earlier today for, among other things, being unable to wait more than 23 seconds to spill material non-public information to now-known insider trader Raj Rajaratnam. Also, he needs to come up with about $24.9 million, if anyone’s feeling generous. Read more »

On Tuesday, Rajat K. Gupta, the former managing director of the consulting firm McKinsey & Company who was convicted of insider trading, is scheduled to report to a minimum-security prison camp in Massachusetts, spending the next two years not far from his one-time friend and partner in crime, Raj Rajaratnam…In an interesting twist, Mr. Rajaratnam, the man to whom Mr. Gupta was convicted of giving corporate secrets on a raft of companies, including Goldman Sachs, is in FMC Devens’ federal medical center. Mr. Rajaratnam, the founder of New York hedge fund Galleon Group, is a diabetic and FMC Devens’ medical unit provides dialysis. His facility is next to the satellite camp where Mr. Gupta will be. One of the differences between the two prisons is that Mr. Rajaratnam has slightly longer visiting hours. On Fridays, he can mix with friends and family from 8:30 a.m. to 3 pm; Mr. Gupta can receive guests only from 2:30 p.m. to 8:30 p.m. [Dealbook]

The sentencing of former SAC Capital Advisors LP hedge fund manager Mathew Martoma, who faces what may be the longest insider trading prison-term in history, will be delayed following a defense request for additional time, a court clerk said. Martoma, 40, was convicted in February in what prosecutors have called the biggest insider trading scheme ever by an individual. He could face almost 20 years in prison for trading on illegal tips about an Alzheimer’s drug made by Elan Corp. and Wyeth LLC that gained SAC $276 million and earned him a $9.3 million bonus. Martoma’s lawyers requested in a letter to U.S. District Judge Paul Gardephe last week that the June 10 sentencing be postponed for more than a month, citing a late report by the court’s Probation Department. [Bloomberg]

After a high-profile setback involving a certain outspoken NBA owner (not that one), the SEC thought it had figured out how to get a jury to see things its way. Did one not just find that a Texas septuagenarian was every bit the conniving fraudster that the SEC said he was?

Well, Mary Jo White & co.’s winning streak did not last long, so they’re doing what it takes to prevent the start of another losing streak. Read more »

  • 03 Jun 2014 at 12:10 PM

Someone Still Believes In Steve Cohen

It may be the woman with whom he shares a marital bed, but every person counts. Read more »

At any other time, fine, Billy Walters could deal with the fact that federal authorities are reportedly “examining a series of well-timed trades” made by him and golfer Phil Mickelson, that Carl Icahn may or may not have mentioned in passing to the the men. But not now. Not when he’s gearing up for the fourth annual “World’s Sexiest Golf Tournament,” which is less than three months away and needs his undivided attention. Read more »