It doesn’t take much to make Leon Cooperman mad, so it’s no surprise that the cranky old billionaire and hedge fund legend went through the roof when the SEC suggested he may have engaged in a little bit of insider-trading, which alleged insider-trading was brought to their attention by his son, who didn’t know that he was selling his old man up the river. “We have done nothing wrong and categorically deny” the charges, which “disappointed” him even more than that time Wayne failed to get a gold star on his spelling test and struck out twice during a t-ball game on the same day, proved to be the most measured comments old Coop would have on the matter. In the ensuing months, he threatened to pick up his toys and go home and promised to spend an “astronomical” amount of money to clear his name. “We could have settle this matter with the SEC for an amount that is far less than I donate to charity every year,” he said back in October. “But I refused to do so because I know that we acted lawfully and appropriately.”
It seems that Cooperman has had a change of heart, however, and has now settled the charges for an amount far less than he donates to charity every year.
Now, nearly eight months later, he and his firm, Omega Advisors, have agreed to settle, paying just under $5 million in civil penalties and forfeited profits.
But unlike other hedge fund managers who have reached settlements with the Securities and Exchange Commission in insider trading cases, Mr. Cooperman is not admitting any wrongdoing. Significantly, he will not be barred from the securities industry.
We’re guessing the SEC’s flexibility on those matters may have something to do with Cooperman’s belated embrace of discretion as the better part of valor, even more than negotiating the regulator down from $8 million. There’s also the fact that the judge set to oversee Cooperman’s trial wasn’t terribly enamored of his rather limited theory of insider trading.
Either way, Cooperman lives to trade another day, although he will be saddled with a baby-sitter—one, presumably, with a more liberal interpretation of what constitutes illicit trading—until his 79th birthday. No word as to whether said monitor gets the pull-out couch.
Stephanie Avakian, acting enforcement director at the agency, said on Thursday that the “settlement protects against future violations while requiring Cooperman and Omega Advisors to pay significant fines for their misconduct.”
She noted that the settlement requires Omega to retain an outside consultant to monitor trading activity until 2022.