Hedge Fund Manager Charged with Insider Trading

September 21, 2016

The SEC charged Leon G. Cooperman and his firm Omega Advisors, Inc. with insider trading based on material nonpublic information he learned in confidence from a corporate executive. The SEC alleged that Cooperman generated substantial illicit profits by purchasing securities in Atlas Pipeline Partners (APL) in advance of the sale of its natural gas processing facility in Elk City, Oklahoma.  Cooperman allegedly used his status as one of APL’s largest shareholders to gain access to the executive and obtain confidential details about the sale of this substantial company asset.  Cooperman and Omega Advisors allegedly accumulated APL securities despite explicitly agreeing not to use the material nonpublic information for trading purposes, and when APL publicly announced the asset sale its stock price jumped more than 31%.

According to the SEC, when Omega Advisors received a subpoena nearly a year-and-half later about its trading in APL securities, Cooperman contacted the executive and tried to fabricate a story to tell if questioned about this trading activity.  The SEC stated that the executive was shocked and angered when he learned that Cooperman traded in advance of the public announcement.

The SEC further charged Cooperman with failing to timely report information about holdings and transactions in securities of publicly-traded companies that he beneficially owned, alleging that he violated federal securities laws more than 40 times in this regard.

Click Leon Cooperman and Omega Advisors, Inc. (September 21, 2016) to access the SEC’s complaint.