Insider Trading




Court Upholds SFC Conviction
Asia Pacific

The Hong Kong Securities and Futures Commission (SFC) has announced that the Court of Final Appeal has dismissed an application for leave to appeal by Sammy Ma Hon Kit and Cordelia Tso Kin Wah against their convictions for insider dealing. The decision marks the end of the first prosecution for insider dealing since it was made a criminal offence in 2003.
SFC’s media release (15 March 2011)
(Source: SFC)


Former Investment Banker Sentenced and Fined
Americas

Bloomberg reports that former UBS investment banker Igor Poteroba, who admitted to insider trading in December 2010, has been sentenced to 22 months jail and ordered to pay a US$25,000 fine. Mr Poteroba has agreed to forfeit proceeds from his insider trading, which amount to US$465,000.
Bloomberg: Ex-UBS Banker Poteroba Sentenced to 22 Months Prison for Insider Trading (22 March 2011)
(Source: Bloomberg)


Former Intel Director Testifies in Galleon Insider Trading Trial
Americas

Reuters reports that former Intel Corporation (Intel) managing director Rajiv Goel has testified that he disclosed the company’s secrets to “close friend [and] hedge fund founder” Raj Rajaratnam, who is the prime accused in the Galleon Insider trading trial. Mr Rajaratnam has been accused of acquiring 125,800 Clearwire Corp (Clearwire) shares based on insider information, just two days before a possible venture between Clearwire and Sprint Nextel Corp, a project into which Intel agreed to invest US$1 billion, reports Reuters. Reportedly, Mr Goel has also admitted to disclosing confidential information about Intel’s April 2007 quarterly earnings announcement.
Reuters: Rajaratnam trial hears Intel leaks admission (22 March 2011)
(Source: Reuters)


State of Massachusetts Alleges Insider Trading at Hedge Fund
Americas

Massachusetts Secretary of State William Galvin has charged RRC Bio Fund, a small hedge fund, with insider trading, alleging that the fund traded on inside data provided to it by an “expert network.” According to the complaint, the fund’s founder, James Silverman, had no experience running a hedge fund and accrued losses of 16.9% the first year that the fund traded in 2007. After Silverman began paying the expert network Guidepoint Global $80,000 a year for access to its network of physicians, however, the fund made several well-timed trades on two pharmaceutical companies and improved its performance tremendously. The Secretary of State is looking to shut down the hedge fund, force it to return all profits from the alleged insider trades, and pay fines.
Reuters: Massachusetts charges hedge fund used insider info (9 March 2011)
(Source: Reuters)


“Dramatic Testimony” at Insider Trading Trial
Americas

Reuters reports that former McKinsey & Co partner Anil Kumar has admitted to leaking stock tips about the firm’s clients to Galleon Group LLC co-founder and prime accused in the Galleon insider trading trial Raj Rajaratnam. Kumar reportedly admitted to the acceptance of US$1.75 million from Rajaratnam for furnishing such information. The one time billionaire “is accused of creating a network of tipsters who fed him inside information that gave him an unfair advantage over other stock traders”, reports Reuters.
Reuters: Ex-McKinsey partner tells jury he tipped Rajaratnam (10 March 2011)
(Source: Reuters)