Leon Cooperman and his hedge fund Omega Advisors have agreed
to pay almost $5 million to settle insider trading charges,
according to the Securities and Exchange Commission.
Under the settlement, Omega will be required to maintain
until 2022 an on-site independent consultant who will be able
to access trading records and electronic communications without
prior notice to the firm, the SEC said in a May 18 statement. The consultant can recommend
improvements and conduct training, and will report to the
In September 2016, the SEC filed a complaint alleging that Cooperman and
Omega had generated significant illegal profits in
2010 by trading in Atlas Pipeline Partners based on insider
information from an Atlas Pipeline executive, who told
Cooperman the company planned to sell one of its significant
assets. The SEC complaint stated that even though the executive
warned Cooperman not to trade based on the information,
Cooperman began purchasing the companys stock in advance
of the announcement of the sale.
Cooperman and Omega made no admission nor did they deny any
wrongdoing as part of the settlement, said the firms
attorney Daniel Kramer of Paul, Weiss, Rifkind, Wharton &
Omega Advisors assets have dropped to $3.6 billion as of
April 30, from $6.7 billion at the start of 2016.
The New York hedge fund firm gave a presentation to at least
one institutional investor regarding the allegations, meeting
with the City of Milford, Connecticuts Pension and
Retirement Board on Oct. 20, 2016, according to the meeting minutes. An Omega representative described
the allegations from the SEC during the meeting and stated the
firm had not done anything wrong, said Christopher Cody, chair
of the City of Milfords pension and retirement board.
Cody said he and the board were satisfied with Omegas
responses that the investigation would not distract the firm
from its investment process.
We didnt feel that it was prudent to withdraw
from the fund at the time, and we felt we should wait to see
how it played out, Cody said, adding that since the
investigation has been resolved, the board may consider
increasing its investment with Omega in the future.
The City of Milfords pension, which has about $330
million in assets, currently has $19 million invested with
Omega, said the funds investment consultant John-Oliver
Beirne at Beirne Wealth Consulting.