U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19984 / January 29, 2007
SEC v. Guillaume Pollet, United States District Court for the Eastern District of New York, No. 05-CV-1937 (SLT)(JO) (E.D.N.Y.)
Former SG Cowen Managing Director Agrees to a Permanent Injunction and Pays $150,000 in Civil Penalties to Settle Charges of Insider Trading and Fraud in Connection With "PIPE" Offerings
On January 26, 2007, the Honorable Sandra L. Townes, United States District Court Judge for the Eastern District of New York, entered a final judgment against Guillaume Pollet ("Pollet"), a former managing director of SG Cowen & Co., LLC ("SG Cowen"). The final judgment orders Pollet to pay a civil penalty in the amount of $150,000. Previously, on November 21, 2006, Judge Townes had entered a partial judgment permanently enjoining Pollet from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5. Pollet consented to the entry of the judgments without admitting or denying any of the allegations in the Commission's Complaint. In addition, Pollet consented to the issuance of a December 12, 2006 Commission Order barring him from association with any broker or dealer.
On April 21, 2005, the Commission filed its action against Pollet in the United States District Court for the Eastern District of New York. The Commission's Complaint alleged that, during 2001, Pollet traded in the securities of ten public companies after receiving confidential non-public information that these entities were either engaged in, or were contemplating engaging in, "PIPE" financings. A "PIPE" is a private investment in public equity. Specifically, the Complaint alleged that Pollet routinely sold short the publicly traded securities of the PIPE issuers prior to the close of the PIPE transaction in order to lock in gains for SG Cowen's proprietary account.
The complaint further alleged that, in several instances, Pollet's short selling was directly contrary to specific representations in securities purchase agreements that no short selling would take place or had taken place, and that the PIPE shares were being purchased with investment intent. At the time Pollet made these representations on behalf of SG Cowen, he had already started to short sell the securities of these PIPE issuers.
The staff acknowledges the assistance of the U.S. Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation in this matter.
For further information, please see Litigation Release No. 19199 (April 21, 2005) and SEC Release No. 34-54924, Admin. Proc. File No. 3-12503 (December 12, 2006).
