Updated:

Jan 14, 2019

Original:

May 28, 2010

A Word Of Advice To Those Considering Taking Up Insider Trading, Courtesy Of Pequot

Author:

So you're contemplating being on the giving or receiving end of some hot tips are you? Before you do so, may we make a suggestion? Obviously we're not going to tell you to stop and think about the fact that it's still currently frowned upon to trade on material non-public information. You've made your decision and we support that. What we are going to strongly suggest is that you consider a) NOT discussing your activities with your spouse or b) vow now, no matter how bad it gets, to stay married to this guy or girl, 'cause if you don't he/she will throw it all back in your face in an attempt to get you nailed to the wall.

The Securities and Exchange Commission said yesterday it obtained “direct evidence” of market-moving information passed to Arthur Samberg of Pequot Capital Management Inc. by David Zilkha from a hard drive in possession of Karen Kaiser, Zilkha’s former spouse. That means Kaiser may be eligible for a whistleblower reward of up to 10 percent of the $10 million fine Samberg and Pequot agreed to pay in settling the case. “The bounty is by no means the reason why we brought forth the evidence to the SEC, but it is something that we certainly are going to be pursuing,” her lawyer, Mark Sherman, said in an interview yesterday.
“Divorce can be the scariest thing on Wall Street,” said Peter Henning, a former SEC enforcement attorney who teaches at Wayne State University Law School in Detroit. “It exposes all of your secrets. People don’t hide things from their spouses.”

Like we told you several weeks ago, Art Samberg and Pequot Capital Management today agreed to settle insider trading charges with Securities and Exchange Commission for $28 million. The SEC Division of Enforcement's also brought a case against the alleged tipper, David Zilkha, a former Microsoft employee. That case will continue in an administrative proceeding before the Commission.

Despite a valiant attempt at appeal.

In the summer of 2009, Jessica Mang, far left, met an investment banker named Thomas Ammann at a nightclub in London. Both liked what they saw and started seeing each other "at least once a week," on days he wasn't with his other girlfriend, Christina Weckwerth. Things were going well, but by November, Mang wanted more. So when Ammann said he was going to take her on a romantic getaway to Seychelles, and all she had to do first was use her own money to trade on material non-public information he'd obtained from his job at Mizuho International about Canon’s purchase of OCE NV, she jumped at the chance. Not only did he want to go away with her (huge!) but he was entrusting her with such an important project (huger!); Mang had read all the dating books and knew that when a guy asks you to violate securities laws, it meant things were getting serious. “He basically said that I show him that I trust him -- I invest the money, he still hadn’t specified how -- once that’s done, we’ll go on holiday in the Seychelles,” Mang said today at a London criminal court. “I thought that was a massive leap in commitment.” She said Ammann told her if she didn’t do it, “he didn’t want to be with me anymore.” “I thought, you know, this is a relationship that’s going to go somewhere, I definitely thought we were exclusive as well,” Mang said. “It wasn’t just sleeping together, in my mind we were definitely boyfriend-girlfriend from the start.” Ammann suggested that she should invest so they could build a future together, which she said she thought was a “very sweet and considerate thing he was doing.” Things that are unanswered at time but presumably be cleared up by the time the trial concludes: 1) When Ammann asked Weckworth to insider trade on his behalf (in April 2009), did he dangle a vacation in her face, too? Did she agree to the deal because she also thought it was indication wedding bells weren't far off, or was she just in it for the financial gain? 2) UNDER WHAT CIRCUMSTANCES* COULD THIS MISUNDERSTANDING POSSIBLY OCCUR: Mang said she didn’t know what due diligence was and “thought it was just a cute nickname he had for me.” If you have any ideas, we're all ears. Ex-Banker’s Girlfriend Says Trades on Tips Showed Trust [Bloomberg] Earlier: Girlfriend Insider Trading On Two-Timing Boyfriend’s Behalf Found Roommate’s Judgment A Little Uncalled For Related (re: breaking the law for your boyfriend because he promises to take you on vacation): What To Do (Or Not Do) Upon Waking Up In A Car “Driving Through A House,” Part II *Did overhear a phone conversation in which he told someone "I'm spending 80 hours a week doing due diligence," and she assumed he meant her? Because otherwise we've got nothing.

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