Schottenfeld Settles Insider-Trading Charges

Mar 31 2010 | 2:37am ET

A trading firm that employed three people charged in the Galleon Group insider-trading case has settled civil charges leveled against it by the Securities and Exchange Commission.

Schottenfeld Group agreed to pay $1.2 million, according to a court filing. The New York-based firm also agreed to cooperate with the SEC’s ongoing investigation and enforcement action. Schottenfeld neither admitted nor denied any wrongdoing.

Zvi Goffer, a proprietary trader at the firm, has been accused of masterminding one of the two interlocking insider-trading circles. He, five other traders and two lawyers were sued by the SEC in November. Goffer, known to his fellow insider-trading suspects as “Octopussy,” and one of the lawyers, Arthur Cutillo, have been charged criminally in the Galleon case and have pleaded not guilty.

Two other Schottenfeld employees, Gautham Shankar and David Plate, are among the 21 people charged in the case. Plate has pleaded not guilty, while Shankar has pleaded guilty and is cooperating with the authorities.

Disgorgement of allegedly illicit profits earned for the firm by its traders account for $742,000 of the amount Schottenfeld will pay. The firm also accepted a $371,200 fine and $96,200 in prejudgment interest.

Schottenfeld is still facing a separate SEC enforcement action stemming from the other half of the alleged insider-trading circle, involving Galleon founder Raj Rajaratnam.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.