SEC Charges Leon Cooperman With Insider Trading

Sep 22, 2016, 00:26
SEC Charges Leon Cooperman With Insider Trading

"The Securities and Exchange Commission today charged hedge fund manager Leon G. Cooperman and his firm Omega Advisors with insider trading based on material nonpublic information he learned in confidence from a corporate executive".

The SEC charges allege that Cooperman knew about the sale of the gas facility prior to its being made public, and that Omega's purchase of Atlas stock was planned in advance of the release of this information such that Cooperman and his firm could benefit from the resulting boost in stock price later on.

According to the SEC's complaint, when Omega Advisors received a subpoena almost a year-and-half later about its trading in APL securities, Cooperman contacted the executive and tried to fabricate a story to tell if questioned about this trading activity.

The billionaire who grew up in the Bronx first informed investors in March that he might face charges, after he received a notice from the government.

Leon Cooperman, chairman and chief executive of Omega Advisors, speaks during a 2015 interview in NY.

"Somebody should investigate that", the family member responded, apparently unaware of the origin of the trading. A company executive informed him about the pending sale, the SEC announcement said. The SEC said this executive was "angry" upon learning Cooperman traded. Cooperman had agreed not to use the information to trade, the SEC alleged.

Cooperman on July 27, 2010 sent an email to a family member saying "good news on Atlas Pipeline", explaining that the Elk City operation was sold, which would let the company pay off bank debt.

After a 2015 deal, Atlas Pipeline's name changed to Targa.

Cooperman's family member even emailed Atlas investors asking them about the suspicious trades.

Omega also showed a stake in Targa after it bought Atlas past year.

In addition, the SEC said, Cooperman starting in 2010, repeatedly failed to file on time, or at all, required reports on his holdings and transactions in the securities of eight public companies.

Instead, Cooperman directed Omega Advisors to buy shares in the company over several days.

Cooperman wanted the executive to say he had not shared confidential information with the hedge fund manager about the sale, according to the complaint.

Three years ago, Steven A. Cohen's SAC Capital Advisors pleaded guilty to insider trading but Cohen was personally never charged.

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