Cooperman: Omega's AUM Down To $3.4B Following SEC Allegations

Jan 5 2017 | 11:37pm ET

Leon Cooperman’s Omega Advisors has seen assets under management drop to $3.4 billion in the wake of SEC allegations last year of insider trading, the famed hedge fund investor said on Thursday.

Appearing on CNBC, Cooperman laid the blame for the AUM drop squarely on the regulator, saying the pending charges damaged his business. Omega managed approximately $5.2 billion around the start of last year. 

Cooperman, a former partner at Goldman Sachs known for an outspoken style, was one of the few large hedge fund managers to publicly recommend investors “hang tough” last January as stocks embarked on their worst annual start in recent memory. A pervasive bear market in stocks, he said at the time, was unlikely.

Cooperman and Omega received a Wells notice from the SEC in March 2016 and he and Omega were charged with insider trading in late September. The allegations, which Cooperman has strenously denied, revolve around Omega’s 2010 investments in Atlas Pipeline Partners. 

"I was truly surprised at the destructive power the SEC has," Cooperman said during the CNBC interview. "They’ve done substantial damage to my business, and I think, in the end, for no reason."

Cooperman’s funds, meanwhile, did well last year. Omega’s credit fund was up 16%  in 2016, while the firm’s equity-only fund gained 10% and its diversified strategy 8%, according to Reuters. 

As for the broader market, Cooperman cautioned investors during the interview that the U.S. stock market was "fully valued" and that further gains over the next two months would make him bearish on equities. However, he also added that he sees the new year as a period of “normalization” under incoming president Donald Trump if some of the new administration’s policy goals, like lower taxes and reduced regulations, come to pass. 

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