(Adds comment from Cooperman's lawyers)
May 18 Billionaire hedge fund manager Leon
Cooperman and his firm Omega Advisors Inc agreed on Thursday to
pay $4.95 million to settle the U.S. Securities and Exchange
Commission's insider trading lawsuit against them.
The accord resolves charges that Cooperman and Omega reaped
about $4.09 million of profit in 2010 by trading in Atlas
Pipeline Partners LP, a longstanding holding, based on
confidential tips that Cooperman received from an Atlas
executive about a planned asset sale.
Cooperman and Omega did not admit wrongdoing in agreeing to
the settlement, which includes $2.76 million of fines and a
requirement that an independent consultant monitor their trading
activity for five years.
Court approval is required. Neither defendant was subjected
to industry bans, which often accompany SEC settlements.
Daniel Kramer and Theodore Wells, two of the lawyers
representing Cooperman and Omega, in a joint statement said they
and their clients were pleased with the outcome.
The settlement with Cooperman, 74, resolves one of the
highest-profile U.S. insider trading cases, which have cast
shadows over well-known hedge fund managers like Galleon Group's
Raj Rajaratnam and SAC Capital Advisors' Steven A. Cohen.
Omega has also suffered, with assets under management
falling to about $3.6 billion as of March 31 from about $5.4
billion when the SEC sued in September.
On March 20, U.S. District Judge Juan Sanchez in
Philadelphia ruled that the SEC could pursue claims that
Cooperman "misappropriated" information despite the apparent
absence of a prior agreement by him not to trade.
Cooperman's lawyers had been preparing an appeal, faulting
the SEC's "aggressive and untested" theory that their client's
post-disclosure agreement, an oral promise, to keep information
confidential could justify insider trading charges.
Thursday's settlement ends that process, and avoids a trial
that had been scheduled for Nov. 6.
Cooperman is worth $3 billion, according to Forbes magazine.
The case is SEC v Cooperman et al, U.S. District Court,
Eastern District of Pennsylvania, No. 16-05043.
(Reporting by Jonathan Stempel and Jennifer Ablan in New York,
additional reporting by Trevor Hunnicutt; editing by Tom Brown)