Cooperating Ex-SAC Trader Worked At Citadel 'Insider Trading Group'

Jul 25 2013 | 10:36am ET

Today's indictment of SAC Capital Advisors on criminal insider-trading charges may well be a death sentence for that firm, but it must also be uneasy reading for another hedge fund giant.

The charges describe former SAC trader Richard Lee—who pleaded guilty to fraud charges this week and is cooperating with authorities—as a former member of the "insider-trading group" at a firm identified as "Hedge Fund A." That firm is Citadel Investment Group, Reuters reports.

Lee worked at Citadel from 2006 through 2008, the year before he joined SAC. He was fired by Chicago-based Citadel for a violation of the firm's policies, a Citadel spokeswoman told Reuters, but his termination was "unrelated to anything about insider trading."

According to the indictment, SAC hired Lee—who is unrelated to Richard Choo-Beng Lee, another former SAC trader who pleaded guilty to insider-trading as part of the Galleon Group case—despite being warned that he "was known for being part of Hedge Fund A's 'insider trading group.'" Lee pleaded guilty to trading on insider information about several stocks, including Yahoo!

Citadel has not been accused of any wrongdoing.

Lee's group at Citadel, principal strategies, was closed at the end of 2008.

Prior to joining Citadel, Lee worked at Farallon Capital Management from 2003 to 2005. He worked at SAC from 2009 through 2011 and again from 2012 until March.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Looking for a way to keep warm during the cold weather or rather alleviate your cold while under the weather?