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Hedge Fund Manager Settles For Being The Eighth Person To Beat Insider-Trading Rap

He wanted first, but...this will do.
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Back in May of last year, Titan Capital Management’s Steven Slawson set himself a goal: To become the first person in recent memory to win an acquittal on insider-trading charges. He had a few things going for him, notably that he was being charged in Atlanta, which means Preet Bharara and his winning streak were not a factor. But he also had some things going against him, like the fact the Preet Bharara has shown that juries are absolutely eager to throw the book at hedge fund managers painted to look like cheating scumbags.

Alas, the wheels of justice do not turn swiftly, and that deprived Slawson of pioneer status. For just months after he proclaimed his eagerness to prove his innocence at trial, Raj Rajaratnam’s little brother won the coveted plaudit of “first!” and did it by ending Preet’s streak, at that. Then, a few months later, a federal appeals court asked whether all of those things Preet said were insider-trading were in fact insider-trading, setting a few more people free.

But do not weep for Steve Slawson. First, and obviously, because he did beat the I-T rap he set out to beat. And he even did it without an assist from the Second Circuit.

Federal prosecutors in Atlanta charged him with violating a different securities fraud statute,18 U.S.C. § 1348, which was adopted in 2002 as part of the Sarbanes-Oxley Act. The Justice Department argued that this law did not require proof of a benefit being passed to the tipper….

The trial court agreed, so the jury instructions made no reference to finding Mr. Slawson’s knowledge that the tipper received a benefit in exchange for the information, or that one was even given to the source.

N.J. hedge fund manager cleared of Carter’s insider trading charges [Reuters]
A New Way to Charge Insider Trading [DealBook]


Art Samberg, Pequot Settle Insider Trading Charges for $28 Million

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.