Thursday, 29 January 2015
Last updated 2 min ago
Jan 10 2011 | 2:15pm ET
The Securities and Exchange Commission has sued a hedge fund, its founder and an analyst, the latest to be accused of insider-trading in the Galleon Group case.
The lawsuit alleges that New York-based Trivium Capital Management made more than $15 million in illicit profits trading four stocks on confidential information provided by two others sued today. According to the SEC, Roomy Khan, their star witness in the Galleon cases, served as a go-between for the hedge funds and tipsters.
In addition to the firm itself, co-founder Robert Feinblatt and analyst Jeffrey Yokuty were charged in the civil case. The SEC also charged Sunil Bhalla, a senior executive at Polycom and Shammara Hussain, who worked at Market Street Partners, which was doing consulting work for Google Inc.
Polycom and Google are among the stocks allegedly traded illegally by Trivium. The hedge fund is also accused of illegally trading Hilton Corp. and Kronos Inc. shares. None of the four people sued today have been charged criminally—a total of 21 people have been, including Khan and Galleon founder Raj Rajaratnam. The SEC, by contrast, has sued 27 defendants in total.
"Today's action reveals disturbingly corrupt arrangements — faithless company executives who secretly pass corporate information to hedge fund managers willing to violate the law for profit," SEC enforcement chief Robert Khuzami said. "Market participants need to understand that by engaging in such behavior they invite SEC scrutiny, and we will uncover their conduct and take aggressive action."
According to the SEC, Bhalla tipped off Khan to two corporate takeovers and two quarterly earnings reports, and Khan then passed that information on to Feinblatt, Yokuty and other alleged participants in the insider-trading circle. Hussain is accused of passing on tips to Kahn about Google earnings.
The SEC is seeking fines and disgorgement, and wants Bhalla permanently barred from serving as an officer or director of publicly-traded companies.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…