NEW YORK Whittier Trust Co, a southern California asset management firm, and its former fund manager Victor Dosti have agreed to pay $1.68 million to settle civil regulatory charges that they conducted insider trading in shares of three technology companies.
The settlements with the U.S. Securities and Exchange Commission come amid a sprawling insider trading probe by federal authorities that has been focused mainly on hedge funds.
Several dozen defendants have been criminally or civilly charged since the probe was unveiled in October 2009.
In a complaint filed on Friday in the U.S. District Court in Manhattan, the SEC accused Whittier and Dosti of illegal trading in Dell Inc, Nvidia Corp and Wind River Systems Inc shares based on confidential tips from Danny Kuo, then a Whittier fund manager who Dosti supervised.
The SEC said Dosti used nonpublic information from Dell and Nvidia employees to trade ahead of five earnings announcements between 2008 and 2010, and from an Intel Corp employee about the chipmaker's talks to buy Wind River in 2009.
According to the complaint, tips about Dell had been funneled to Kuo through Sandeep Goyal, then a Neuberger Berman analyst, and Jesse Tortora, then an analyst at now-defunct hedge fund Diamondback Capital Management.
Tips about Nvidia went to Kuo through Hyung Lim, whom he had befriended at poker parties and who had gotten tips from someone in Nvidia's finance department, the SEC said.
Whittier has more than $8 billion of assets under management, according to its website.
The South Pasadena, California-based firm agreed to pay about $1.52 million representing ill-gotten gains, a fine and interest to settle with the SEC. Dosti, who lives in San Marino, California, agreed to pay nearly $159,000.
Neither Whittier nor Dosti admitted wrongdoing in agreeing to settle.
In a statement, Whittier said it is glad to have resolved the matter, and cooperated with the government. "The conduct engaged in by two former employees is completely contrary to the core values of this organization," it added.
Gary Lincenberg, a partner at Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg representing Dosti, had no comment.
Dell and Nvidia have figured in other insider trading cases.
Among these are the December 2012 convictions of Level Global Investors LP hedge fund co-founder Anthony Chiasson and former Diamondback portfolio manager Todd Newman, and the current criminal case against Michael Steinberg, a fund manager at billionaire Steven Cohen's firm SAC Capital Advisors LP.Goyal and Tortora have pleaded guilty and are cooperating in the case against Steinberg, who has pleaded not guilty. Kuo and Lim have also pleaded guilty, and are cooperating with prosecutors.
SAC and Cohen have not been accused of wrongdoing. Chiasson and Newman are appealing their convictions.
The case is SEC v. Dosti et al, U.S. District Court, Southern District of New York, No. 13-03897.
(Editing by David Gregorio and Carol Bishopric)