U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22185 / December 9, 2011
SEC v. Galleon Management, LP, et al., Civil Action No. 09-CV-8811 (S.D.N.Y.) (JSR)
Former Schottenfeld Trader Zvi Goffer Settles SEC Insider Trading Charges
The Securities and Exchange Commission announced today that on December 5, 2011, the Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York entered a consent judgment against Zvi Goffer in SEC v. Galleon Management, LP, et al., 09-CV-8811, an insider trading case the SEC filed on October 16, 2009. The SEC charged Goffer, who was a registered representative and a proprietary trader at the broker-dealer Schottenfeld Group, LLC during the relevant time period, with using inside information to trade ahead of impending acquisitions.
In its action, the SEC alleged that, on July 2, 2007, Goffer was tipped with material non-public information that Hilton Hotels Corp. would be acquired the next day at a significant premium. Additionally, in March 2007, Goffer was tipped material non-public information that Kronos Inc. would be acquired in about a week for a substantial premium. On the basis of the material non-public information he received, Goffer traded in the Schottenfeld accounts he managed.
To settle the SEC’s charges, Goffer consented to the entry of a judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $265,709.33, plus prejudgment interest of $59,564.56, for a total of $325,273.89. In a related SEC administrative proceeding, Goffer consented to the entry of an SEC order permanently barring him from association with any broker or dealer, investment adviser, municipal securities dealer or transfer agent, and barring him from participating in any offering of a penny stock. Goffer previously was found guilty of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Zvi Goffer, 10-CR-0056 (S.D.N.Y.), and was sentenced to a ten-year prison term and ordered to pay criminal forfeiture of $10,022,931.
The SEC also announced today the entry of a consent judgment against Goffer in a separate case alleging insider trading in other securities. See SEC v. Cutillo et al., No. 09-CV-9208 (S.D.N.Y.) (RJS).