Hedge Fund Billionaire Leon Cooperman Charged with Insider Trading

A hedge fund manager and former CEO of Goldman Sachs Asset Management has been charged with insider trading by the US Securities and Exchange Commission (SEC).

Leon Cooperman and Omega Advisors, the firm he founded in 1995, were accused of generating “substantial illicit profits” through trading shares of Atlas Pipeline Partners in 2010. Cooperman was chairman and CEO of Goldman Sachs Asset Management between 1989 and 1991.

Cooperman used his position as a “significant” shareholder—owning roughly 9%, or $46 million, of the company’s shares—to get information from an executive about the sale of a natural gas processing facility, the SEC said in its legal complaint.

“Cooperman and Omega Advisors allegedly accumulated [Atlas] securities despite explicitly agreeing not to use the material nonpublic information for trading purposes,” the regulator added in a press release. When the sale was announced publicly, “its stock price jumped more than 31%.”

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Omega Advisors was issued a subpoena relating to its trading in Atlas stock 17 months later, the SEC said. However, the regulator alleged that Cooperman subsequently attempted to “fabricate a story” with the Atlas executive. “The executive was shocked and angered when he learned that Cooperman traded in advance of the public announcement,” the SEC said.

On top of the Atlas allegations, the SEC has charged Cooperman with “failing to timely report information about holdings and transactions in securities of publicly-traded companies that he beneficially owned.” The regulator alleged he had broken securities laws “more than 40 times in this regard.”

The SEC is demanding repayment of “ill-gotten gains plus interest [and] penalties,” as well as permanent injunctions against Cooperman and Omega.

The US regulator’s clampdown on insider trading in recent years has resulted in a number of high-profile actions, including against the former CIO of the Wyoming Retirement System, a number of former portfolio managers from Steven Cohen’s SAC Capital, and a hedge fund manager at Visium Asset Management.

The Pension Protection Fund (PPF) has appointed a head of investment strategy as it continues to grow its internal expertise.

Ian Scott has joined the UK’s ‘lifeboat’ fund from Barclays, where he was head of global and European equity strategy. In the newly created role at the PPF, Scott will advise on tactical trades and “medium-term shifts away from the strategic asset allocation,” the fund said in a statement.

“Ian brings with him a wealth of expertise, and will help build our capabilities in strategic and tactical asset allocation,” said CIO Barry Kenneth. “Attracting professionals of Ian’s caliber to join our award-winning team is an endorsement of where we are going.”

Prior to joining Barclays in 2013, Scott spent nearly four years at Nomura where he was head of equity strategy and quantitative research. He also worked on the equity strategy team at Lehman Brothers between 1995 and 2008. Scott has a master’s degree in economics from the University of Warwick.

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“In its relatively short history the PPF has established a well-deserved reputation for innovative fund management,” Scott said. “I am looking forward to building upon and enhancing that, especially in the areas of strategic and tactical asset allocation.”

The PPF, which oversees £23 billion ($30 billion) for the pension funds of bankrupt companies, last year appointed Trevor Welsh from Aviva Investors to lead its liability-driven investment program.

Separately, the £21 billion Railways Pension Scheme (Railpen) has also hired to its in-house team, appointing Anna Rule to the newly created role of head of property.

Rule will join at the start of 2017 to oversee Railpen’s £2 billion of real estate investments and the fund’s relationships with other investors, including long-standing partner Orchard Street Investment Management. She previously worked at Aviva Investors, responsible for mandates worth £2.2 billion.

“Anna’s appointment is an important step in further developing our in-house investment expertise so that we can strengthen our ability to deliver attractive investment returns for our members,” said Richard Williams, investment director at Railpen.

In February, Railpen appointed three investment managers to its internal team: Sweta Chattopadhyay joined the fund’s private markets team, while Matthias Eifert and Tony Guida joined the public equities team. In the past few years Railpen has been overhauling its investment portfolio, moving away from asset class silos towards “growth” and “matching” pools.