| NEW YORK
NEW YORK May 29 A New Jersey hedge fund manager
pleaded not guilty on Thursday to charges he traded on inside
information about the children's clothing company Carter's Inc
, according to court papers.
Steven Slawson, the co-founder of Titan Capital Management,
is the latest defendant to be charged in a probe centered on the
Atlanta-based retailer. He faces 25 counts of securities fraud,
10 counts of wire fraud and one count of conspiracy.
Prosecutors accused Slawson of obtaining advance information
about Atlanta-based Carter's quarterly results from 2005 to 2010
from a paid consultant who, prosecutors said, had learned the
details in turn from former Carter's executives Eric Martin and
The consultant is cooperating with authorities and was not
named in the indictment.
Titan Capital and Slawson's own personal accounts traded in
Carter's stock based on the inside tips, prosecutors said,
illegally netting profits and avoiding losses.
"He's innocent, and we look forward to proving that at
trial," said Slawson's lawyer, Todd Harrison, in a phone
interview on Thursday.
Martin and Posey previously pleaded guilty to conspiracy in
connection with the investigation.
Mark Megalli, a former portfolio manager at the now-defunct
hedge fund Level Global Investors LP, was also charged with
trading on inside information from Martin and Posey and pleaded
guilty in November to conspiracy.
Dennis Rosenberg agreed to pay more than $600,000 last year
to settle U.S. Securities and Exchange Commission charges that
he got illegal tips from Carter's executives and passed them on
to hedge fund advisers.
The criminal cases stem from a larger probe of insider
trading and financial fraud at Carter's.
The SEC previously brought civil charges against the
company's former president, Joseph Pacifico; its former
executive vice president, Joseph Elles; and Kohl's Corp
merchandise manager Michael Johnson, who worked on the Carter's
account. All three were accused of participating in a scheme
that caused Carter's to overstate its earnings while
understating its expenses between 2004 and 2009.
Carter's is cooperating with the SEC as part of a
The case is U.S. v. Slawson, U.S. District Court for the
Northern District of Georgia, No. 14-cr-186.
(Reporting by Joseph Ax; Editing by Lisa Shumaker)