US charges celebrity billionaire with insider trading

WASHINGTON: US regulators on Wednesday charged Leon Cooperman, the celebrity billionaire founder of the Omega Advisors hedge fund group, with racking up more than US$4mil (RM16.5mil) in illicit profits from insider trading.

The Securities and Exchange Commission (SEC) said Cooperman earned the profits trading in options ahead of a crucial asset sale by Atlas Pipeline Partners Ltd (APL) in 2010, which shored up the company’s finances and boosted its share price.

It said that Cooperman, a prominent Wall Street figure, had leveraged his status as a significant APL shareholder to communicate with an unnamed APL executive and find out about the impending asset sale.

The executive “shared confidential information with Cooperman about the Elk City sale because he believed Cooperman would maintain the information in confidence and not trade on it,” it said.

Ironically, one of the first people to take notice of possible insider trading ahead of the APL deal was a family member of Cooperman working at Omega, according to the SEC.

Not knowing that Cooperman was behind the trading, the family member told another APL executive that the SEC should investigate the trades, the SEC said.

The charges also said that Cooperman sought after the APL deal was announced to cover up the trading with help from the executive.

The SEC also accused Cooperman of “repeatedly” failing to report his beneficial holdings and transactions in public companies as required by securities laws.

Cooperman, 73, is a longtime figure in New York finance with a fortune estimated by Forbes at US$3.1bil (RM12.8bil).

The SEC said one key strategy behind Cooperman’s investing success was “to accumulate large positions in publicly-traded companies and develop close relationships with those companies’ senior executives.” - AFP