The founder of the K1 Group, a German fund-of-funds manager, was arrested on October 28th as part of a joint US and German investigation. Helmut Kiener faces charges of fraud and breach of trust in German courts after evidence amounted that he may have deceived the likes of Barclays, BNP Paribas, JP Morgan Chase & Co. and Societe Generale into lending a combined $400 million to facilitate fraudulent investments and supporting his lavish lifestyle. Continue reading
The Wall Street Journal is reporting that the government’s investigation into insider-trading is being built on information from five cooperating witnesses, some of whom received information from investors and companies that haven’t been originally charged in the probe, potentially broadening the case.
The complaint released Thursday named two additional cooperating witnesses in the government’s insider-trading case against Raj Rajaratnam, founder of hedge fund Galleon Group: Steven Fortuna, of Boston hedge fund S2, and Gautham Shankar, a proprietary trader at Shottenfeld. Mr. Rajaratnam has denied wrongdoing. The men, join three others — Roomy Khan, Ali Far and Richard Choo-Beng Lee — who were previously identified as cooperating witnesses in the case and have admitted to engaging in illegal insider trading for many years. The cooperators have pleaded guilty to charges including conspiracy and insider trading and are cooperating in the hope of getting lighter penalties, investigators say.
Mr. Lee’s Cooperation Agreement suggests that he engaged in illegal insider trading while working at Steven Cohen’s SAC Capital, the Connecticut-based hedge fund. Coincidentally, Mr. Cohen is said to be “out of the country” until Monday in the midst of all of this. Stay tuned …
The SEC announced yesterday that former General Counsel of Chilton Investment Company, Norm Champ, will assume the role of Associate Regional Director for Examinations in the SEC’s New York Regional Office (NYRO). Mr. Champ will assume the new position in January 2010 where he will direct approximately 100 examiners within the New York Region. In response to this announcement, George S. Canellos, Director of the SEC’s New York Regional Office, stated:
“Norm brings to our inspection program an unusual diversity of experience — as general counsel of a multi-billion dollar hedge fund complex, as a university lecturer, and as a policy thinker. He is ideally suited to build on the great work of his predecessor, Tom Biolsi, and also bring his own vision to the examination program. I believe Norm will be an outstanding addition to the NYRO leadership team.”
As a current member of the Board of Directors of the Managed Funds Association, Mr. Champ will resign from this position to join the SEC.
More information on Norm Champ can be found in the SEC’s press release.
As reported by CNBC, seven people have been arrested—and another seven have been charged—in a widening federal investigation of insider trading in the hedge fund industry.
The new defendants include hedge fund traders and money managers, a mergers and acquisitions attorney, a corporate executive, and an associate analyst for the Moody’s credit rating agency.
In addition, the SEC has announced that it has amended its complaint in its insider trading enforcement action against billionaire Raj Rajaratnam and Galleon Management LP by charging 13 additional individuals and entities.
The SEC also announced today that in a separate complaint it has charged a pair of lawyers for tipping inside information in exchange for kickbacks as well as six Wall Street traders and a proprietary trading firm involved in a $20 million insider trading scheme.
From time to time we have industry experts come on board to guest blog in order to provide our readers with interesting and insightful commentary. Today’s article is by Tom Young of EXENET, a leading IT consultancy.
Recent amendments to Regulation S-P has brought greater attention to high-profile cases where organizations are accused of failing to provide adequate customer information protections as outlined in Rule 30(a). For example: when an IT department fails to follow up on anti-virus problems or for leaving 5,000 customer records at the curb. Continue reading