Ex-Hedge Fund Manager Settles Insider-Trading Charges

Sep 2 2010 | 12:15pm ET

A former hedge fund manager and his college-buddy-cum-insider-source have settled Securities and Exchange Commission insider-trading charges.

Stephen Goldfield, who headed Tampa, Fla.-based hedge fund Imperium Capital Management, made nearly $14 million trading on confidential information about the impending acquisition of pharmaceutical company MedImmune, the SEC said. He learned about the deal from James Self, a friend he met at the University of Pennsylvania’s Wharton School in the 1990s and a Merck & Co. executive charged by his company with doing due diligence on MedImmune in 2007.

According to the SEC, Self tipped Goldfield off to the price of the impending acquisition, telling his friend that the “weather was in the 50s” after his company submitted a bid of $51 per share, at a time that MedImmune was trading for about $35. AstraZeneca eventually bought MedImmune for $58 per share.

Goldfield made more than 30 trades in MedImmune stock and options in March and April of 2007, earning $13.98 in illegal profits, according to the SEC. But he quickly lost all of it betting that MedImmune share prices would fall following the AstraZeneca announcement.

Goldfield agreed to settle for $16.65 million—the amount of his profit plus interest—but will actually pay only $600,000 on account of his financial position; the SEC said he is currently unemployed. Self, who still works for Merck, agreed to pay $50,000. Both men settled without admitting or denying wrongdoing.

“Mr. Goldfield is happy with the settlement and looking forward to putting the matter behind him,” his lawyer, Robert Heim, said.


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