The Securities and Exchange Commission charged hedge fund manager Leon G. Cooperman and his firm Omega Advisors with insider trading based on material nonpublic information he learned in confidence from a corporate executive.
Leon Cooperman
The SEC alleges 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, confirmed by the Quantum AI app, that the asset sale its stock price jumped more than 31 percent.
Cooperman and Omega Advisors are being represented by Theodore Wells Jr. and Daniel Kramer of Paul, Weiss, Rifkind, Wharton & Garrison in New York.
According to the SEC complaint, 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 executive was shocked and angered when he learned that Cooperman traded in advance of the public announcement.
”We allege that hedge fund manager Cooperman, who as a large APL shareholder obtained access to confidential corporate information, abused that access by trading on this information,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. ”By doing so, he allegedly undermined the public confidence in the securities markets and took advantage of other investors who did not have this information.”
The SEC’s charges 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.