insider-trading

  • News

    The Ballad of Roomy Khan

    Life is terribly unfair. You help bring down Raj Rajaratnam and get yelled at by a defense lawyer during another insider-trading trial, but you tell a few white lies, destroy some evidence, warn some of your friends—including the only fugitive in the whole insider-trading crackdown—that the Feds are on to them and perjure yourself a little, and you don’t get to get away with your second insider-trading conviction.

    / Feb 1, 2013 at 5:16 PM
  • News

    Informant’s Assistance On Insider Trading Case Slightly Undone By Telling “Series” Of Lies To Government

    On the one hand, Roomey Khan’s assistance as a cooperating witness was “extremely substantial.” On the other, she seems to have told between 1 and 100 lies to government officials.

    / Jan 28, 2013 at 6:17 PM
  • News

    Doug Whitman is Sorry

    Sorry that he is going to prison. Because he certainly doesn’t sound—through counsel—like he’s sorry about the insider-trading that he was convicted of in August.

    / Jan 25, 2013 at 12:25 PM
  • Rajat Gupta, Gary Naftalis

    News

    Rajat Gupta: My Buddy Raj is a Big, Fat Liar*

    All things considered, Rajat Gupta would still prefer not to go to jail.

    / Jan 22, 2013 at 5:41 PM
  • unperturbed

    News

    SEC Insider Trading Investigation Reveals SEC Is Really Good At Insider Trading Investigations, Anyway

    Sheelah Kolhatkar’s cover story today in Bloomberg BusinessWeek about the SEC’s hunt to capture Steve […]

    / Jan 17, 2013 at 11:48 AM
  • Exterior of Headquarters of SAC Capital Advisors, L.P. in Stamford

    News

    Ex-SAC Analyst Spared Prison, Still Faces The Wrath of Cohen

    Take note, insider-traders and those who might be accused of it in spite of their innocence: If you wear a wire and you don’t have to go to jail.

    Wesley Wang, the former SAC analyst who helped convict one former boss and is probably helping to build cases against his bosses at SAC and Trellus Management, will get to keep doing so from the comfort of his northern California home.

    / Jan 10, 2013 at 1:57 PM
  • if you see something say something

    Expert: Hedge Funds Unlikely To Be Thrilled By Rule Requiring Them To Rat Out Employees Engaging In Securities Fraud, Other Criminal Activities On Their Watch

    U.S. financial regulators are pushing to turn hedge funds into informers on the white collar […]

    / Jan 8, 2013 at 2:06 PM
  • a lament

  • Hedge fund manager Mathew Martoma accused in insider trading case

    News

    Mathew Martoma Has No Idea What The Government Is Talking About

    …vis–à–vis their insider trading charges against him (the former SAC Capital portfolio manager maintained his […]

    / Jan 3, 2013 at 1:42 PM
  • steve-cohen-SAC-Capital

    News

    Has Steve Cohen Started Wearing A Ping Jiang Mask While Walking The SAC Trading Floor, White Board Marker In Hand?

    Unclear but, based on recent reports, very possible. If you can come up with another idea re: how the “intimidating Cohen has become even more intimidating” in the wake of MartomaGate, we’re all ears.

    / Dec 18, 2012 at 6:21 PM
  • If I were better at Excel this would be easier to update. Scatterplots get fiddly fast.

    News

    Convicted Insider Traders Probably Regretting Association With Group Calling Itself “Fight Club”

    It gives me no particular pleasure to update the ol’ insider trading sentencing chart every […]

    / Dec 17, 2012 at 6:39 PM
  • tomhanksbiglimo

    News

    Doctor Who Tipped Off SAC Manager Wasn’t Conspicuous About His Wealth Except When He Was Telling Strangers On Planes About All The Fancy Hotels And Limo Rides Insider Trading Afforded Him

    As you may have heard, in addition to the salary he was paid by the University of Michigan, Dr. Sidney Gilman made about $100,000/year through his side-gig advising “a wide network of Wall Street traders.”  That network included included Mathew Martoma, recently charged with running “the most lucrative insider trading scheme ever,” based on the information he received from Gilman, who made it a habit of leaking highly confidential information to the former SAC Capital employee. While most people that engage in fraud can’t help but spend their ill-gotten gains in a flashy way that attracts unwanted attention (expensive cars, private jets, chinchilla fur coats) the Times reports that Sid Gilman’s supplementary income “was not readily apparent in his lifestyle in Michigan.” For instance, no second home and no bragging to his colleagues about his life on Wall Street. Still, on at least one occasion, the doctor couldn’t help but let the underage girl sitting next to him on a flight home know that she was in the presence of a BSD.

    / Dec 17, 2012 at 2:21 PM
  • steve-cohen-SAC-Capital

    News

    The Feds Are Struggling To Understand Why Mathew Martoma Won’t Just Turn On Steve Cohen Already, God Damn It

    “We have been remarkably successful in convincing persons to cooperate with the government, and provide evidence to us, and in court of law,” SEC director of enforcement Robert Khuzami said during a press conference the day the government went public with its charges of insider trading against former SAC Capital employee Mathew Martoma. To the untrained ear, Khuzami probably appeared to be speaking to no one in particular, just sending a general message to any would-be criminals out there that once the government got to their co-conspirators, it’d be all over. No one wants to do time, and everybody flips. To those who’ve been following Operations Perfect Hedge, though, and have watched the Feds’ relentless pursuit of Steven A. Cohen,  it was obvious they were sending a clear message to the Big Guy: “We got ya boy, and ya goin’ down.” And since its track record of getting people to turn on their colleagues and in some cases, their best friends (see: Noah Freeman/Donald Longueuil, and these guys, and these guys, and this guy) really has been “remarkably successful,” and since Martoma has a wife and two young kids and his whole life ahead of him, Khuzami and Co. probably assumed they had this one in the bag. But not so.

    / Dec 14, 2012 at 12:49 PM
  • News

    Tiger Asia’s Founder Is Happy To Have Learned His Lesson Re: Wire Fraud And Insider Trading

    Earlier today, Bill Hwang, the founder of the Tiger Cub’s Asia-based branch, Tiger Asia, pleaded guilty to one count of wire fraud and agreed to fork over $44 million to make allegations by the SEC of insider trading in Chinese bank stocks go away. According to Hwang, his firm “regrets the actions for which is accepts responsibility today and is grateful that this matter is now resolved.” According to SEC director of enforcement Robert Khuzami, who we would love to consider a side job writing fables for children* about foxes who trade on unreleased information about clinical trials of Alzheimer’s drugs and take advantage of innocent hens, Hwang was a very bad boy and should serve as a cautionary tale for anyone thinking about breaking the law.

    / Dec 12, 2012 at 4:44 PM
  • david slaine

    News

    David Slaine, Government’s Undercover “Tip-Mining Machine,” Apparently Under The Impression Insider Trading Works On A 3-Strike Basis

    Remember David Slaine? For those who need a refresher, he is the former Morgan Stanley managing director and ex-Galleon trader who began working as an FBI informant in 2007 and who was outed for doing so by the Wall Street Journal in January 2010. At the time, we learned a few notable things about Slaine, some of them germane to his role in helping the government go after people trading on material non-public information, others special in their own way, like:

    1. He takes french fries, and perhaps all snacks, very seriously.

    In 1993, Slaine triggered a fist-fight with a colleague on the trading floor after needling him because he wouldn’t share his french fries. Others broke up the fight.

    2. He doesn’t wait for people to towel off and get dressed before knocking their teeth out.

    One morning early in 2001, before trading began, Gary Rosenbach, then was the No. 2 executive under Mr. Rajaratnam, and Slaine were in a steam room together after exercising at an Equinox Fitness Club. Mr. Rosenbach was pressuring Mr. Slaine to improve his performance. As Mr. Rosenbach lay on his back on a bench, Mr. Slaine punched him, giving him a black eye and ending their friendship.

    3. Humans aren’t the only ones often asked “you want a piece of me?”

    He once smashed a computer keyboard in a fit of rage, says a person familiar with the incident.

    4. While working on Wall Street, he eschewed the traditional channels of employee recruitment (Wharton, etc), preferring instead to pick up fresh analysts at the club.

    While at Morgan Stanley, he met [Craig] Drimal, then a nightclub bouncer at the Vertical Club in Manhattan. The two quickly formed a friendship based on a shared passion for weight lifting and their mutual ability to bench-press 400 pounds…Shortly after arriving at Galleon, Mr. Slaine persuaded Galleon officials to give a position to Mr. Drimal, who then was working as a bouncer at the Roxy nightclub in Manhattan.

    5. Being a person with whom he “formed a friendship based on a shared passion for weight lifting and [a] mutual ability to bench-press 400 pounds,” possibly the greatest line written about anyone who’s ever worked on Wall Street and which which cannot be said enough, means little in the long run if he knows you’ve been playing it fast and loose with securites laws.

    In July 2007, the FBI showed up at Mr. Slaine’s door on W. 57th Street in Manhattan and confronted him. Mr. Slaine agreed to help the government. At the time, federal prosecutors in Manhattan were trying to make headway on another investigation that eventually led to the charges involving Galleon. They asked Mr. Slaine who he knew that might be participating in insider trading. Mr. Slaine’s answer: his friend Mr. Drimal, according to people familiar with the matter. In September 2007, Mr. Slaine—identified in the complaint as CS-1—tried out his body wire for the first time, meeting Mr. Drimal in New York. During the meeting, Mr. Drimal gave Mr. Slaine a piece of paper with four stock symbols, according to the complaint. He told Mr. Slaine the four companies were all acquisition targets. At the meeting’s end, Mr. Drimal told Mr. Slaine to destroy the list. He warned him to “be careful” in trading the securities because no news of the takeovers had surfaced publicly…After the meeting, Mr. Slaine went to a nearby hotel where an FBI agent was waiting, says a person familiar with the matter. The pair went to a room where Mr. Slaine removed the wire.

    Anyway, Bloomberg recently checked in to see what Slaine’s been up to these last couple years and other than his “multi-year experience” with the FBI being “tremendously traumatic,” he seems to be doing pretty well.

    / Dec 3, 2012 at 1:16 PM
  • best option

    News

    Insider Trading Pro Tip: IMing “i don’t want to go to jail” Won’t Make It Happen

    Once again we need to talk about insider trading. This SEC press release is about […]

    / Nov 29, 2012 at 3:09 PM
  • steve-cohen-SAC-Capital

    News

    SAC Capital Invites Employees To Gather ‘Round For A Chat That Could Simply Be To Notify Everyone They’re Switching Fleece Manufacturers

    What? Anything is possible and that would be grounds for an all-staff call. You don’t know.

    / Nov 29, 2012 at 12:42 PM
  • ehh whaddarya gonna do

    News

    Everybody’s Jumping On The Insider Trading Bandwagon

    It’s a tribute to Steve Cohen’s prescience/power/something that, on what is otherwise not a great […]

    / Nov 28, 2012 at 4:48 PM
  • saccapitalfleece

    News

    Things Could Be A LOT Better At SAC Capital Right Now

    Back in October, we detailed a list of things that, if you are the hedge fund manager who goes by the name Steven A. Cohen, you really don’t want to hear first thing in the morning. They included: “The fleeces are on back order”; “Your ex-wife is in the lobby”; “There’s a photographer here who said he’s been authorized to shoot you wearing a king’s robe and crown for a set of playing cards”; “You’ve been outmaneuvered for the Toledo Mud Hens. But I hear the Binghamton Mets may be available.” Today we must update that list to include another thing, perhaps THE thing,* that people delivering news to Cohen don’t want to relay. Paraphrasing but any variants on: “Mr. Cohen, we’ve received a Wells notice and by the way, they’re considering naming you personally.”

    / Nov 28, 2012 at 11:49 AM
  • jamesgormantakingcareofbusiness

    Opening Bell

    Opening Bell: 11.28.12

    Gorman Enlists Morgan Stanley Workforce in Fiscal Cliff Campaign (Bloomberg)
    Morgan Stanley Chief Executive Officer James Gorman called on the investment bank’s employees to pressure U.S. lawmakers into reaching an agreement that averts the so-called fiscal cliff. “No issue is more critical right now for the U.S. economy, the global financial markets and the financial well-being of our clients, which is why I am asking you to participate in the democratic process and make your voice heard,” Gorman wrote in a memo, a copy of which was obtained by Bloomberg News. The message went to about 30,000 U.S. workers including 16,000 financial advisers, said James Wiggins, a company spokesman.

    Buffett Expects ‘Fiscal Cliff’ Fix, But Not By December 31 (CNBC)
    Buffett didn’t outline a specific solution that he prefers, saying he could “go with any number of plans.” But he thinks the end result should have U.S. revenues at 18.5 percent of GDP and expenditures at 21 percent. Those levels would be “sustainable” because the ratio of the nation’s national debt to GDP wouldn’t increase, and might even fall over time.

    SAC Capital Received a Wells Notice From SEC Last Week, May Be Subject to Civil Charges (CNBC)
    Story developing.

    EU Approves Spanish Banks’ Restructuring Plans (WSJ)
    European Union regulators Wednesday gave the green light to nearly €40 billion ($51.78 billion) in euro-zone funding for Spain’s stricken bank sector, as it approved the restructuring plans for four lenders. BFA/Bankia, NCG Banco, Catalunya Banc and Banco de Valencia SA BVA.MC will require a total of €37 billion for their recapitalization plans, the regulators said. The European Union’s Competition Commissioner, Joaquin Almunia, said bondholders would face losses.

    Will Italy Need A Bailout In 2013? (CNBC)
    “We still see as our baseline scenario that Italy will likely be forced to ask for an international bailout at some point in 2013,” said Citi Analyst Giada Giani in a report on the country. “Italian economic fundamentals have not really improved, despite some improvement in market conditions. The negative feedbacks from fiscal austerity on growth have been severe, as the ability of the private sector to absorb fiscal tightening by lowering its saving rate is limited.”

    EU Agrees New Controls for Credit Rating Agencies (Reuters)
    European Union countries and the bloc’s parliament agreed on Tuesday to introduce limited controls on credit ratings agencies after their judgment was called into question in the debt crisis. Michel Barnier, the European commissioner in charge of regulation who helped broker a deal on the new law, said it aimed to reduce the over-reliance on ratings and establish a civil liability regime. The new rules should make it easier to sue the agencies if they are judged to have made errors when, for example, ranking the creditworthiness of debt.

    Deutsche Bank Sued Over Home Mortgage-Backed Securities (Bloomberg)
    Deutsche Bank, Germany’s largest lender, was sued by a trustee over claims that some securities sold by a unit of the bank were backed by home-mortgage loans taken out by fraudulent borrowers. DB Structured Products Inc.’s pool of more than 1,500 mortgages included more than 320 that were defective, HSBC Bank USA (HSBA), acting as trustee, said in a lawsuit filed yesterday in federal court in Manhattan. “Borrowers lied, with or without the knowledge of the loan originators themselves, concerning how much money they owed, how much money they made, whether and where they worked, and where they lived,” HSBC claimed. “A handful of instances of such inaccuracies is perhaps to be expected. Hundreds of instances of borrower dishonesty is not.” HSBC seeks unspecified damages and said Frankfurt-based Deutsche Bank must buy back the breaching loans under its agreements with the trustee.

    Woman Jailed For Attacking Beau Over Bad Sex (TSG)
    A Florida woman was jailed last night for a post-coital assault on her boyfriend, an attack the victim says was prompted when only he climaxed during a sexual encounter in the couple’s residence. Raquel Gonzalez, 24, was arrested Monday afternoon for felony domestic battery and booked into the Manatee County lockup, where bond has been set at $750. According to a Manatee County Sheriff’s Office report, Gonzalez and Esric Davis, 30, are “boyfriend and girlfriend who live in the same home and are involved in a sexual relationship.” Deputies noted that Davis and Gonzalez were “involved in sexual intercourse” when “Esric then climaxed and Raquel did not.” Which reportedly angered Gonzalez, who allegedly “began hitting and scratching [Davis], causing scratches near his eye and nose.” Davis told investigators that Gonzalez “goes off” frequently and that she had previously been physical with him.

    Be right back, hon … with a $53M tip (NYP)
    Anthony Chiasson, the founder of hedge fund Level Global, started getting illegal insider tips in 2008 when the $4 billion firm was going through a rough patch, a key government witness told a jury yesterday. The witness, Sam Adondakis, a former analyst who worked for Chiasson, said he told his boss tips on Dell came straight from the tech giant…The Dell tip that netted the firm millions wasn’t without its drama. On Aug. 27, the day before Dell announced its results, Chiasson, Level Global co-founder David Ganek, and Greg Brenner, fund executive, held a conference call about their Dell position. At the time, Adondakis, on vacation in the Hamptons, was sitting down to breakfast with his girlfriend, he said yesterday. Adondakis said he remembers the conference call well because his girlfriend “was annoyed” by the conversation, which took him away from their meal for a good 40 minutes.

    Banks Feel Currency Pinch (WSJ)
    Banks reported sharp drops in currency-trading revenue last quarter, in many cases deepening a slump that began early this year. Even Deutsche Bank AG, the world’s biggest foreign-exchange bank, reported revenue “significantly lower than the prior year” even as the volume of transactions it handled hit a record high in the third quarter. Banks are struggling on two fronts. A calm in currency markets relative to the swings of the last few years has reduced overall trading activity. And the explosive growth of electronic trading has brought transparency to a roughly $4 trillion-a-day market, making buyers and sellers less reliant on big banks to pair them up.

    Executives’ Good Luck in Trading Own Stock (WSJ)
    Among 20,237 executives who traded their own company’s stock during the week before their companies made news, 1,418 executives recorded average stock gains of 10% (or avoided 10% losses) within a week after their trades. This was close to double the 786 who saw the stock they traded move against them that much. Most executives have a mix of trades, some that look good in retrospect and others that do not.

    ‘Two and a Half Men’ star apologizes for offending cast and crew (CNN)
    A day after a video posted online showed him describing “Two and a Half Men” as “filth” and advising viewers to stop watching the sitcom, actor Angus T. Jones apologized to the show’s cast and crew Tuesday. “I apologize if my remarks reflect me showing indifference to and disrespect of my colleagues and a lack of appreciation of the extraordinary opportunity of which I have been blessed,” Jones said in a statement released by his publicist. “I never intended that.” The 19-year-old actor — who plays Jake Harper, the CBS sitcom’s “Half” man — didn’t detail what motivated him to make comments…In the video, the actor, who’s been on the show since 2003, repeatedly asks viewers not to watch the sitcom. “I’m on ‘Two and a Half Men,’ and I don’t want to be on it,” Jones said. “You cannot be a true God-fearing person and be on a television show like that. I know I can’t. I’m not OK with what I’m learning, what the Bible says, and being on that television show. You go all or nothing.”

    / Nov 28, 2012 at 8:54 AM
  • saccapitalfleece

    News

    SAC Capital Invites Investors To Gather ‘Round For A Chat

    SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen, plans […]

    / Nov 27, 2012 at 12:22 PM
  • Steve Cohen's head

    Hedge Funds

    Investors Don’t Want Their Hedge Funds To Get Caught Insider Trading

    Every publication today ran a story about how SAC investors are harrumphing around about pulling […]

    / Nov 26, 2012 at 6:31 PM
  • saccapitalstamford

    RSVPs

    Mathew Martoma Will Be Unable To Make The SAC Capital Holiday Party This Year

    Former SAC Capital Advisors LP portfolio manager Mathew Martoma, charged in what prosecutors called the […]

    / Nov 26, 2012 at 1:57 PM
  • sidgilman

    News

    Preet Bharara: University Of Michigan Doctor Financially Compensated For Leaking Confidential Drug Trial Data To Former SAC Trader Just An Innocent Pawn In Big Bad Hedge Fund’s Game

    As you may have heard, earlier today, Mathew Martoma, a former portfolio manager in SAC Capital’s CR Intrinsic unit, was charged with allegedly running “the most lucrative insider trading scheme ever,” netting $276 million for the fund. He did so based on information that was given to him by Sid Gilman, a University of Michigan neurologist and chair of a “safety-monitoring committee that oversaw a clinical trial by Wyeth LLC and Elan Corp.  into whether the drug bapineuzumab, or bapi, was safe for patients with mild-to-moderate Alzheimer’s disease.” Over an 18-month period, Gilman and Martoma met 42 times, in addition to emailing and chatting over the phone. For example:

    / Nov 20, 2012 at 5:46 PM
  • stevecohen

    News

    Minor Upset Involving Former Employee Not Gonna Ruin Steve Cohen’s Turkey Day

    According to a SAC Capital spokesman, “Mr. Cohen and SAC are confident that they have […]

    / Nov 20, 2012 at 4:21 PM
  • saccapitalfleece

    News

    Things Could Be Worse But They Could Also Be Better At SAC Capital Right Now

    The good news, if you are Mr. Steve Cohen: you were neither charged nor “mentioned by name” in the criminal complaint against your former employee, Mathew Martoma. The less good news: YOU ARE PORTFOLIO MANAGER A. YOU NEVER WANT TO BE PORTFOLIO MANAGER A!

    / Nov 20, 2012 at 1:28 PM
  • SDR4_poolbar

    That's how they triangulate

    Connection To A Company Called “Yeah Baby” Not Even The Best Part Of “High School Buddies” Insider Trading Scam

    Over the past several years, much has been made about the supposed incompetence of the Securities and Exchange Commission. The regulator failed to realize Bernie Madoff had been running an illegitimate Ponzi scheme, despite more or less being told by Bernie Madoff himself, “I am running an illegitimate Ponzi scheme.” It went after David Einhorn, when it should have been going after Allied Capital, the company the hedge fund manager told them was committing fraud. Its proposal for stepping up investigators’ games was to start a Fraud College.* Until recently, it employed individuals in the office responsible for “ensuring exchanges follow guidelines concerning…computer audits, security, and capacity” who had “little or no experience with exchange technical matters.” At this point, there have been so many stories about the SEC getting things wrong that the default is to assume it fucked up, even when that is not actually the case. What’s more, even when Team Schapiro is on top of its game, resources are so strained that many scams that should be caught fall through the cracks. So you can maybe understand why a group of “high school buddies,” along with a few other guys they picked up along the way, who were engaging in securities fraud, weren’t too worried about getting caught.

    / Nov 20, 2012 at 11:49 AM
  • saccapitalfleece

    News

    CR Intrinsic PM Arrested On Insider Trading Charges Can Take Solace In Knowing He Is Peerless In His Field

    Former SAC Capital Advisors LP portfolio manager Mathew Martoma was charged in what U.S. prosecutors […]

    / Nov 20, 2012 at 11:22 AM