FROM: SEC
April 10, 2012
SEC v. Spyridon Adondakis et al., Civil Action 12-CV-0409 (SDNY)(HB)
SEC Obtains Final Judgments on Consent against Diamondback Capital Management LLC
The SEC announced that the Honorable Harold Baer, Jr., United States District Judge, United States District Court for the Southern District of New York, entered a Final Judgment on Consent as to Diamondback Capital Management LLC (“Diamondback”) on April 6, 2012, in the SEC’s insider trading case, SEC v. Spyridon Adondakis et al., Civil Action 12-CV-0409 (SDNY) (HB).
The SEC filed its complaint on January 18, 2012, charging two multi-billion dollar hedge fund advisory firms – including Diamondback – as well as seven fund managers and analysts involved in a $78 million insider trading scheme based on nonpublic information about Dell’s quarterly earnings and other similar inside information about Nvidia Corporation.
The SEC’s complaint alleged that in 2008 and 2009, Jesse Tortora, an analyst at Diamondback, obtained inside information about quarterly earnings reports of both Dell and Nvidia and passed that information to Todd Newman, a Diamondback portfolio manager, who used the information to execute trades on behalf of hedge funds managed by Diamondback. These illegal trades in Dell and Nvidia securities resulted in millions of dollars in illicit gains for Diamondback.
The Final Judgment against Diamondback: (1) permanently enjoins the firm from violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and Exchange Act Rule 10b-5; and (2) orders it to pay disgorgement of $5,173,000 plus pre-judgment interest of $832,751.35, for a total of $6,005,751.35, provided that the amount Diamondback owes would be credited, dollar for dollar, by amounts paid pursuant to a non-prosecution agreement between Diamondback and the U.S. Attorney’s Office for the Southern District of New York; and (c) orders it to pay a civil penalty in the amount of $3,000,000.
A PUBLICATION OF RANDOM U.S.GOVERNMENT PRESS RELEASES AND ARTICLES
Showing posts with label INSIDE TRADING. Show all posts
Showing posts with label INSIDE TRADING. Show all posts
Wednesday, April 18, 2012
Sunday, March 25, 2012
INSIDE TRADER SETTLES CHARGES REGARDING 3 COM ACQUISITION KNOWLEDGE
The following excerpt is from the SEC website:
March 20, 2012
Defendant Michael Kimelman Settles SEC Insider Trading Charges
The U.S. Securities and Exchange Commission announced today that on March 16, 2012, The Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York, entered a final judgment against Michael Kimelman in SEC v. Cutillo et al., 09-CV-9208, an insider trading case the SEC filed on November 5, 2009. See Lit. Rel. No. 21283 (Nov. 5, 2009). The SEC charged Kimelman, who was a trader at Lighthouse Financial Group, LLC, with trading on inside information regarding the announced acquisition of 3Com Corp. in September 2007.
In its complaint, the SEC alleged that Arthur Cutillo, a former attorney with the law firm Ropes & Gray LLP, misappropriated from his law firm material nonpublic information concerning, among other things, the potential acquisition of 3Com, and tipped the inside information, through another attorney, to Zvi Goffer, in exchange for kickbacks. The SEC further alleged that Goffer tipped the inside information to a number of individuals, including Kimelman, who traded based on the information, realizing illicit profits of approximately $270,000 in two personal trading accounts.
To settle the SEC’s charges, Kimelman consented to the entry of a final judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $273,255, plus prejudgment interest of $54,582. In a related SEC administrative proceeding, Kimelman consented to the entry of an SEC order barring him from association with any broker or dealer, investment adviser, municipal securities dealer or transfer agent, and barring him from participating in any offering of a penny stock. Kimelman previously was found guilty of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Michael Kimelman, 10-CR-0056 (S.D.N.Y.), and was sentenced to 30 months in prison and ordered to pay a criminal forfeiture of $289,079.
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