Thursday, 18 December 2014
Last updated 4 hours ago
May 28 2010 | 10:11am ET
Whatever her motivations—citizenship, revenge or something else—the ex-wife of the former Pequot Capital Management employee at the center of the insider-trading allegations against the hedge fund probably won’t leave empty-handed.
Karen Kaiser—who was divorced from David Zilkha in 2005—could get a $1 million whistleblower reward for providing “direct evidence” of the alleged Pequot scam to investigators. Under a program instituted in 1989, whistleblowers can be awarded up to 10% of the fines paid in a case. Pequot and founder Arthur Samberg agreed yesterday to pay $10 million in fines—and almost $18 million in disgorgement and prejudgment interest—to settle the Securities and Exchange Commission’s insider-trading allegations.
Neither Pequot nor Samberg, who decided to shutter the hedge fund last year after the SEC renewed its probe, admitted any wrongdoing. The SEC is still pursuing its case against Zilkha, who is alleged to have passed tips about Microsoft Corp., where he was formerly employed, to Pequot.
Kaiser's lawyer told Bloomberg News that his client will pursue the reward.
The SEC originally dropped its case more than three years ago, citing a lack of evidence. But the Zilkha divorce case solved that problem. Incriminating e-mails between Zilkha and Pequot employees, including Samberg, were found on a hard drive Kaiser copied from the couple’s shared computer. Also as part of the divorce, Zilkha’s psychologist testified that her patient was fired when he stopped providing confidential tips to Pequot.
Pequot later settled with Zilkha for $2.1 million.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.