No Jail, No SEC Fine For Insider-Trader Shah

Dec 10 2014 | 5:02pm ET

A former hedge-fund manager who played a key role in the SAC Capital Advisors insider-trading probe has agreed to settle allegations about her own illicit dealings for nearly $400,000.

Reema Shah has struck a deal with the Securities and Exchange Commission for $390,103, approximately the ill-gotten gains earned by her hedge fund at Ameriprise Financial’s RiverSource Investments unit. The settlement ends Shah’s insider-trading saga; she was spared jail time in October.

Shah pleaded guilty in 2012 to swapping tips and illegally trading on them with former Yahoo! Inc. executive Robert Kwok. Facing up to 25 years in prison, she cooperated with prosecutors, secretly recording more than 700 phone calls and wearing a wire to meetings with other suspects.

Shah’s help allowed prosecutors to win several convictions, as well as a guilty-plea from SAC last year.

The SEC also recognized Shah’s cooperation, imposing no monetary penalty on her, only disgorgement and prejudgment interest. Shah was ordered to pay a $500,000 fine in the criminal case.


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