Alleged Pershing Square-Herbalife Tippee Seeks End To SEC Case

Oct 23 2014 | 6:09am ET

A man accused of insider-trading Herbalife shares based on hints he got from a friend who lived with a Pershing Square Asset Management analyst is challenging the Securities and Exchange Commission’s right to challenge his actions.

Jordan Peixoto has become the latest to argue that the SEC’s administrative proceedings are a violation of his constitutional rights. Peixoto, a Canadian, wants the SEC to bring its case against him in federal court.

According to the SEC, Peixoto learned of Pershing Square’s planned presentation alleging Herbalife is a pyramid scheme two years ago from a friend, Filip Szymik. Szymik pieced the hedge fund’s plans together from comments made by his roommate, Pershing Square’s Mariusz Adamski, and a stretch of long hours Adamski worked.

Adamski is not accused of directly tipping his roommate, who has settled with the SEC. Peixoto, accused of making a $47,100 profit, denies wrongdoing.

Peixoto’s constitutional claims mirror those made by right-wing talk-radio host George Jarkesy, who is accused of defrauding investors in his hedge fund. A federal judge ruled this year that Jarkesy must face the SEC’s administrative proceedings before appealing any adverse ruling to a federal appeals court.

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