(Adds details and background on case)
WASHINGTON Oct 13 Artis Capital Management and
a senior research analyst at the hedge fund have agreed to
settle charges related to their failure to detect insider
trading by an employee, the U.S. Securities and Exchange
Commission said on Thursday.
San Francisco-based Artis Capital will disgorge profits of
$5.2 million plus $1.1 million in interest and pay a penalty of
$2.6 million, the SEC said in a statement.
Michael Harden, the employee's supervisor, has agreed to pay
a $130,000 penalty and was suspended from working in the
securities industry for 12 months, the statement said.
The employee, Matthew Teeple, was sentenced in 2014 to five
years in prison after pleading guilty to conspiracy to engage in
Artis Capital and Harden consented to the SEC's order
without admitting or denying the findings, the statement said.
Besides Teeple, a former executive of Foundry Networks Inc
was sentenced to 6-1/2 years in prison in the insider trading
Prosecutors said David Riley, Foundry's former chief
information officer, in 2008 tipped off Teeple about an
unannounced plan for Brocade Communications Systems Inc
to acquire Foundry for $3 billion.
That tip, along with prior information about sales figures
at Foundry that Riley allegedly supplied Teeple, enabled the
hedge fund to earn $39 million, prosecutors said.
(Reporting by Mohammad Zargham; Editing by Phil Berlowitz and