Cooperman, Omega Settle SEC Insider Trading Charges for $4.95 MillionCooperman, Omega Settle SEC Insider Trading Charges for $4.95 Million
The SEC claimed that Cooperman and Omega reaped about $4.09 million of profit in 2010 by trading in Atlas Pipeline Partners LP, a longstanding holding, based on confidential tips.
May 19, 2017
May 18 (Reuters) - Billionaire hedge fund manager LeonCooperman and his firm Omega Advisors Inc agreed on Thursday topay $4.95 million to settle the U.S. Securities and ExchangeCommission's insider trading lawsuit against them.
The accord resolves charges that Cooperman and Omega reapedabout $4.09 million of profit in 2010 by trading in AtlasPipeline Partners LP, a longstanding holding, based onconfidential tips that Cooperman received from an Atlasexecutive about a planned asset sale.
Cooperman and Omega did not admit wrongdoing in agreeing tothe settlement, which includes $2.76 million of fines and arequirement that an independent consultant monitor their tradingactivity for five years.
Court approval is required. Neither defendant was subjectedto industry bans, which often accompany SEC settlements.
Omega did not respond to several requests for comment.
The settlement with Cooperman, 74, resolves one of thehighest-profile U.S. insider trading cases, which have castshadows over well-known hedge fund managers like Galleon Group'sRaj Rajaratnam and SAC Capital Advisors' Steven A. Cohen.
Omega has also suffered, with assets under managementfalling to about $3.6 billion as of March 31 from about $5.4billion when the SEC sued in September.
On March 20, U.S. District Judge Juan Sanchez inPhiladelphia ruled that the SEC could pursue claims thatCooperman "misappropriated" information despite the apparentabsence of a prior agreement by him not to trade.
Cooperman's lawyers had been preparing an appeal, faultingthe SEC's "aggressive and untested" theory that their client'spost-disclosure agreement, an oral promise, to keep informationconfidential could justify insider trading charges.
Thursday's settlement ends that process, and avoids a trialthat had been scheduled for Nov. 6.
Cooperman is worth $3 billion, according to Forbes magazine.
The case is SEC v Cooperman et al, U.S. District Court,Eastern District of Pennsylvania, No. 16-05043.(Reporting by Jonathan Stempel and Jennifer Ablan in New York;Editing by Tom Brown)
