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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22004 / June 17, 2011

SEC v. Adam Smith, Civil Action No. 1:11-cv-0535 (S.D.N.Y.) (JSR)

Former Galleon Portfolio Manager Settles SEC Insider Trading Charges

The Securities and Exchange Commission announced today that, on May 31, 2011, The Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York entered a judgment against Adam Smith in SEC v. Adam Smith, 11-CV-0535, an insider trading case the SEC filed on January 26, 2011.

The Complaint alleged that Smith, a former portfolio manager at New York-based hedge fund investment adviser Galleon Management, LP, traded in the securities of ATI Technologies Inc., based on material nonpublic information concerning the acquisition of ATI by Advanced Micro Devices Inc. that was announced in July 2006. Prior to the announcement, Smith learned of the acquisition from an investment banker, who had received such information while serving as an employee of an investment bank that was advising one of the parties to the acquisition.

To settle the SEC’s charges, Smith consented to the entry of a judgment that: (i) permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement and prejudgment interest, for a total of $149,706.25. The judgment further provides that, based on his agreement to cooperate with the Commission, the Court is not ordering Smith to pay a civil penalty. In a related SEC administrative proceeding, Smith consented to the entry of an SEC order barring him from association with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent. Smith previously pleaded guilty to charges of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Adam Smith, 1:11-cr-00079 (S.D.N.Y.), and is awaiting sentencing.

For further information, see Litigation Release No. 21827 (Jan. 26, 2011).

 

http://www.sec.gov/litigation/litreleases/2011/lr22004.htm


Modified: 06/17/2011