The Inside Story of Insider Trading
Using jailhouse interviews and secret FBI documents, Bloomberg News took readers into the secret world of tipsters, traders and trusted employees to reveal how and why they betrayed their companies, clients and even their spouses in search of millions in illegal profits.
On April 14, 2011, James Fan stood on a parking garage landing at Newark Liberty International Airport, a cheer-you-up letter from his young son in his pants pocket, the prospect of a four-story leap facing him.
Three years into Harvard’s residency program, Joseph F. “Chip” Skowron III quit medicine for Wall Street. He and two partners started a group of health-care investment funds under the auspices of FrontPoint Partners LLC.
David Slaine had a secret for the FBI that summer day, one of scores he would eventually reveal in his role as a dream informant. The subject was Teterboro Airport. Slaine claimed a money manager he knew was using it to profit quietly on trades of health-care stock.
Christie Hefner, former chief executive officer of Playboy Enterprises Inc., said she was shocked as her husband of 15 years, William Marovitz, confessed to her that he was being investigated for suspicious trading in Playboy shares.
Garrett Bauer stood in a New York University lecture hall and warned 150 students not to emulate him. The day trader recounted illegally making millions of dollars over 17 years using corporate merger tips stolen by an attorney.
Sid Gilman, a University of Michigan neurologist, was portrayed by U.S. authorities as a $1,000-an- hour consultant who leaked confidential drug trial data that helped hedge fund SAC Capital Advisors LP illegally avoid losses or make profit of $276 million.
Former Wells Fargo & Co. investment banker John Femenia was charged in Charlotte, North Carolina, last week with leading an $11 million insider trading ring that paid kickbacks in cash and gold for tips on corporate mergers.
On Dec. 17, 2010, InterMune Inc. said European Union regulators had recommended approval of its lung disease drug for sale in Europe. biotechnology firm's shares rose 144 percent, while some options to buy the stock gained more than 500 percent.
SAC Capital Advisors LP, the $14 billion hedge fund run by Steven Cohen, told clients on a conference call that it received a Wells Notice from the U.S. Securities and Exchange Commission, according to a person who listened to the call.
A former SAC Capital Advisors LP portfolio manager told the FBI it was “understood” that those assigned to give their best trading ideas to founder Steven A. Cohen would provide him with insider information, according to an agent’s notes of the conversation.
Phillipp Villhauer was the head trader at SAC Capital Advisors LP who allegedly helped the firm founded by Steven A. Cohen make $276 million on trades that led to the arrest of an ex-hedge fund manager for insider-trading, according to two people familiar with the matter.
An ex-Galleon Group LLC trader and expert-networking consultant were to 10 years and four years in prison for their roles in a nationwide insider trading scandal, just three weeks before Raj Rajaratnam, the man at the center of the investigation, learned his fate.
Former SAC Capital Advisors LP fund manager Mathew Martoma’s arrest came six years after he set upon a path that has led him to a choice: one between a trial that may land him in prison for decades, or a deal to implicate others, possibly including SAC founder Steven A. Cohen.
The biggest insider case ever, an alleged $276 million fraud that has led prosecutors and securities regulators to the inner-circle of SAC Capital Advisors LP’s Steven Cohen, stemmed in part from a referral from the Financial Industry Regulatory Authority.
Steven A. Cohen’s SAC Capital Advisors LP is at the center of the biggest insider case ever brought in a nationwide crackdown on illicit hedge fund trading -- one focusing on the exploitation of secret information on volatile health care stocks often obtained through expert consultants.
Rajat Gupta, who reached the pinnacle of corporate America as managing partner of McKinsey & Co. and director at Goldman Sachs Group Inc. and Procter & Gamble Co., was convicted by a federal jury of leaking inside information to hedge-fund manager Raj Rajaratnam.
Rajat Gupta, the former Goldman Sachs Group Inc. director and McKinsey & Co. managing director who rose to the pinnacle of Wall Street, was sentenced to two years in prison for passing inside tips to his business partner.
A former portfolio manager for Steven A. Cohen’s SAC Capital Advisors LP was charged with what U.S. prosecutors called a record-setting insider-trading scheme that netted as much as $276 million for the hedge fund.
Level Global Investors LP co-founder David Ganek was described by a prosecutor as a co-conspirator in an insider-trading scheme that allegedly involved his fellow hedge-fund co-founder Anthony Chiasson.