Former SAC analyst settles insider charges with SEC
NEW YORK/BOSTON |
NEW YORK/BOSTON (Reuters) - Former SAC Capital Advisors LP analyst Jonathan Hollander reached a settlement with U.S. securities regulators over allegations he engaged in insider trading in his personal account, while working at Steven A. Cohen's $12 billion hedge fund.
In settling with the U.S. Securities and Exchange Commission on Thursday, Hollander agreed to pay a penalty of about $222,000, which included a fine and restitution for profits he, a family member and a friend made from trading on a January 2006 tip about the buyout of the Albertsons' supermarket chain, his lawyer said.
The SEC did not name Cohen's fund in its complaint, which was filed in New York federal court.
"Jonathan has decided to settle this matter rather than engage in costly and protracted litigation with the SEC," said Hollander's lawyer, Aitan Goelman, an attorney with Zuckerman Spaeder. "He is gratified to have the matter behind him and looks forward to moving on."
The disclosure of Hollander's settlement comes on the same day that former SAC Capital portfolio manager Donald Longueuil entered a guilty plea in a different insider trading case. Longueuil pleaded guilty to securities fraud and conspiracy charges.
So far, more than two dozen defendants have admitted to criminal wrongdoing in a nationwide federal probe into insider trading linked to hedge funds.
Hollander and Longueuil both worked for SAC's CR Intrinsic division. But their cases are not related.
In February, prosecutors accused Longueuil of trading on leaks from sources like Winifred Jiau, then a consultant for expert network firm Primary Global Research LLC, and SAC portfolio manager Noah Freeman. Freeman, who already has pleaded guilty, is cooperating with federal authorities.
The SEC's case against Hollander stems from a separate investigation that resulted in last October's conviction of Joseph Contorinis, a former manager of Jefferies Group Inc hedge fund. A federal jury convicted Contorinis of charges that he made more than $7 million in profits by trading on inside information about the Albertsons' buyout.
In January 2010, Reuters first reported that securities regulators were looking into allegations that Hollander might have engaged in insider trading while working at SAC Capital.
Reuters reported that Hollander was the unidentified recipient of illegal tips in a civil complaint filed against former Blackstone Group investment banker Ramesh Chakrapani. In that case, the SEC also charged that the unidentified analyst used the inside information to help his hedge fund employer generate an approximate $3.5 million profit.
In Thursday's complaint, the tipper's identity was not disclosed even though people familiar with the case say it was Chakrapani as was the case in the original complaint.
Last summer the SEC dismissed its insider trading case against Chakrapani. In 2009, prosecutors dismissed a criminal insider trading case against Chakrapani. But the investigation into Hollander continued.
The SEC complaint filed against Hollander did not include an allegation involving trading for SAC Capital's benefit.
In settling with the SEC, Hollander neither admitted nor denied the allegations.
(Additional reporting by Jonathan Stempel in New York; Editing by Bernard Orr and Steve Orlofsky)
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