Behold, The Shakespearean Plot Twist At The Heart Of The Cooperman Insider Trading Case

Coming soon to an old-timey theater near you!
Coming soon to an old-timey theater near you. By Poliphilo (Own work) [CC0], via Wikimedia Commons

via Wikimedia Commons

Act I: Boy grows up idolizing his legendary hedge fund manager father—a strong family man—and follows in his footsteps to launch his own hedge fund.

Act II: Father learns from someone with whom he does business that that business—which has been in a spot of trouble—is going to do something about this. Father intimates that something to the son, who also does business with this person.

Act III: Father buys up all the stocks, bonds and options in that person’s business that he can get his hands on, including for an even younger blood relation than his son. The person’s business announces a major deal which sends the value of the aforementioned soaring. Son notices that someone has been doing something fishy and calls in the magistrates. The Securities and Exchange Commission sues his father as a direct result of this act of inadvertent filial impiety.

He noticed some suspicious trading in Atlas options before the deal was announced, and was outraged at this apparent leak of non-public information. So outraged that, after the announcement, he e-mailed the company to demand a thorough investigation….

Guess whose suspicious options trading that was! Actually it's a little strange that Cooperman's son didn't guess, since Cooperman allegedly told him about the Elk City sale before it was announced. It's a touching display of filial respect: He ran a hedge fund, his dad ran a hedge fund, his dad allegedly told him about the deal before it was announced, he noticed some suspicious options trades before the announcement, he was furious about those trades ... and it apparently never even occurred to him that his dad might have been the one doing them.

Stay tuned for Act IV: Father’s civil trial, and Act V: Thanksgiving.

Hedge-Fund Son Thought Hedge-Fund Dad’s Trades Were Pretty Fishy [Matt/Bloomberg View]