Wednesday, 28 January 2015
Last updated 12 hours ago
Nov 15 2013 | 12:45pm ET
A former Level Global Investors portfolio manager has admitted to insider-trading of Carter's Inc. shares.
Mark Megalli, who formerly led the defunct hedge fund's consumer group, pleaded guilty to conspiracy to commit securities fraud in Atlanta federal court yesterday. His case is not related to the insider-trading case that brought Level Global down and sent its co-founder to prison, but is linked to a growing scandal at the children's clothing company that has seen two former vice presidents plead guilty to criminal charges. In addition, a retired consultant last month settled Securities and Exchange Commission allegations that he passed tips about the company to two hedge fund managers.
In Megalli's case, prosecutors say he traded on tips from a former Carter's investor-relations executive in 2009 and 2010. Those trades earned Level Global between $2.5 million and $7 million, the government said. In some cases, "the information was hot enough that Megalli sometimes conducted the trades while he was still on the phone with his source," the SEC's William Hicks said. Megalli faces an SEC lawsuit, as well.
Level Global closed in 2011, following a Federal Bureau of Investigation raid that would eventually lead to co-founder Anthony Chiasson's conviction on insider-trading charges. Chiasson was sentenced to six-and-a-half years in prison in May.
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…