Statement on Leon Cooperman Settling Insider Trading Charges
Stephanie Avakian, Acting Enforcement Division Director
May 18, 2017
“If approved by the court, this settlement protects against future violations while requiring Cooperman and Omega Advisors to pay significant fines for their misconduct. By imposing an independent consultant to monitor their trading activity, the resolution helps protect our markets from future risk of insider trading.”
* * * * *
Hedge fund manager Leon G. Cooperman and his firm Omega Advisors have agreed to settle insider trading charges and beneficial ownership reporting violations by paying nearly $5 million and subjecting themselves to onsite monitoring by an independent compliance consultant with access to their electronic communications and trading records.
The settlement, subject to court approval, would conclude litigation that included a significant ruling in favor of the SEC after the agency filed its complaint against Cooperman and Omega in September 2016.
Cooperman and Omega agreed to pay:
- $1,759,049 in disgorgement of ill-gotten gains
- $429,041in pre-judgment interest
- $1,759,049 in penalty for the insider trading violation
- $1,000,000 penalty for the beneficial ownership reporting violations (ordered as to Cooperman only)
To guard against insider trading, Cooperman and Omega must retain an onsite independent compliance consultant until 2022 (unless Omega Advisors ceases to be a registered investment adviser prior to that date). The independent consultant:
- can access, without prior notice, their electronic communications, trading records, and research
- will review trades by Cooperman and Omega on an ongoing basis
- will recommend improvements and conduct training
- will report to the SEC
- Cooperman and Omega must make monthly certifications that they were not aware of material nonpublic information prior to any securities trades such that the trades would violate Section 10(b) of the Exchange Act.
- Cooperman and Omega shall outsource their required beneficial ownerships filings to a law firm acceptable to the SEC.
- Omega will conduct training and perform an annual review of Omega’s beneficial ownership reporting policies and procedures.