Hedge Fund, Jail-Bound Ex-Manager Settle Insider Trading Charges

May 13 2008 | 9:31am ET

A Boston-area hedge fund and a former “rogue trader” have settled insider-trading charges, the Securities and Exchange Commission said yesterday.

Burlington, Mass.-based Global Time Capital and its GTC Growth Fund agreed to pay $252,000 in ill-gotten gains, penalties and interest to settle the charges. The fund’s former manager, Michael Tom, will pay $801,000.

Tom pleaded guilty two years ago to criminal insider trading charges. Former Citizens Bank analyst Shegnan Wang, an investor in the GTC Growth Fund, admitted passing on non-public information about Citizens’ planned acquisition of Charter One Bank. Tom then bought Charter One stock and options for the fund, himself and his family, as well as passing on the tip to his brother.

Neither Tom nor Global Time admitted any wrongdoing in the SEC settlement. Global Time called Tom “a rogue trader that it’s cut ties with,” while Tom’s attorney said his client “hopes to move forward with his life.”

Federal prosecutors are trying to put a serious dent in those hopes. Tom is still fighting to stay out of prison, after prosecutors appealed his sentence of three years’ probation, demanding he spend at least three years and one month in prison. In October, the First Circuit Court of Appeals in Boston sided with the Justice Department, citing the “need for some imprisonment.”

RELATED STORIES

Court Says Hedge Fund Insider Trading Requires Jail Time


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Compelling Opportunities In The Alternatives Space

Jul 29 2014 | 9:33am ET

In an environment where many asset classes seem expensive by historical standards...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note