U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21653 / September 16, 2010
SEC v. David R. Slaine, Civil Action No. 10-CV-754 (S.D.N.Y.) (DAB)
David Slaine Settles SEC Insider Trading Charges
The Securities and Exchange Commission announced that today, The Honorable Deborah A. Batts of the United States District Court for the Southern District of New York, entered a final judgment against David Slaine in SEC v. David R. Slaine, 10-CV-754 (S.D.N.Y.), an insider trading case the Commission filed on February 2, 2010. The Commission charged Slaine, a former hedge fund portfolio manager at DSJ International Resources Ltd. (d/b/a "Chelsey Capital"), with violations of the antifraud provisions of the federal securities laws. The Commission alleged that Slaine used inside information tipped by a former executive at UBS Securities LLC ("UBS") to trade ahead of upcoming UBS analyst recommendations for Chelsey Capital and in his personal account.
To settle the Commission's charges, Slaine consented to the entry of a final judgment that: (i) permanently enjoins him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5; and (ii) orders him to pay disgorgement of $836,385. In a related Commission administrative proceeding, Slaine consented to the entry of a Commission order barring him from association with any investment adviser. Based on Slaine's cooperation with the Commission no civil monetary penalties were imposed. In a parallel criminal case before the United States District Court for the Southern District of New York titled, United States v. David Slaine, 09-CR-1222 (RJH), Slaine previously pled guilty to charges of securities fraud and conspiracy to commit securities fraud.
The Commission previously filed insider trading charges against Chelsey Capital and other defendants in connection with this insider trading scheme. See SEC v. Guttenberg, et al., No. 07-CV-1774 (S.D.N.Y.) (PKC)/Lit. Rel. 20022. Chelsey Capital and these other defendants previously entered into settlements with the Commission, and final judgments have been entered against them. Without admitting or denying liability, Chelsey Capital consented to a final judgment that ordered permanent injunctive relief, disgorgement of $3,637,548, prejudgment interest of $1,626,344, and a $3,637,548 civil penalty.
For further information, see Litigation Release Nos. 20022 (March 1, 2007), 20367 (November 20, 2007), 20725 (September 18, 2008), 21086 (June 16, 2009), 21244 (October 8, 2009), 21359 (January 5, 2010), and 21403 (February 2, 2010).