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U.S. Securities and Exchange Commission

Litigation Release No. 21950 / April 28, 2011

Securities and Exchange Commission v. Jonathan Hollander, Civil Action No. 11-CV-2885 (S.D.N.Y. April 28, 2011)

SEC CHARGES FORMER HEDGE FUND PROFESSIONAL WITH INSIDER TRADING

The Securities and Exchange Commission today charged Jonathan Hollander, a former hedge fund professional, with insider trading in Albertson’s, LLC based on material nonpublic information regarding an impending acquisition of ABS that Hollander received from a friend who was employed by the financial advisor retained by ABS in connection with impending acquisition. The Complaint alleges that Hollander traded ABS securities on the basis of the material nonpublic information and also tipped a family member and another friend (the tippees) who also traded ABS securities. As a result of their trading, Hollander and his tippees generated $95,807 in illegal profits.

The Complaint alleges that on January 12, 2006, Hollander purchased a total of 5,600 shares of ABS stock in his personal brokerage accounts. The Complaint further alleges that around the same time Hollander’s family member purchased 425 ABS call options. The Complaint also alleges that on January 17, 2006, the next business day after visiting with Hollander, Hollander’s friend purchased 25 ABS call options and on January 18, he purchased an additional 15 ABS call options.

On Monday, January 23, 2006, prior to the opening of trading, ABS announced it would be acquired by a consortium of buyers. Following the public announcement, Hollander’s tippees sold their ABS holdings. Hollander’s family member made a profit of $72,815 and his friend made a profit of $5,250. Hollander earned a profit of $17,742 in his own brokerage accounts.

Without admitting or denying the SEC’s allegations, Hollander agreed to settle the charges against him. The settlement is pending final approval by the court. Specifically, Hollander consented to the entry of a final judgment permanently enjoining him from violating Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, ordering him to pay disgorgement of $95,807 plus prejudgment interest of and imposing a civil penalty of $95,807. Hollander also consented to the entry of a Commission order, based upon the entry of a final judgment, barring him from association with a broker, dealer, investment adviser, municipal securities dealer or transfer agent with the right to reapply after three years.

The SEC acknowledges the assistance of the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation in connection with this matter.

 

http://www.sec.gov/litigation/litreleases/2011/lr21950.htm


Modified: 04/28/2011