WASHINGTON — The Securities and Exchange Commission
on Monday charged several more people as part of its ongoing hedge-fund
insider trading case, alleging insider dealing in companies including Google.
Those charged include Robert Feinblatt, co-founder of hedge fund Trivium Capital Management LLC, and Trivium analyst Jeffrey Yokuty.
The SEC alleged that Feinblatt and Yokuty engaged in insider trading of Polycom Inc., Hilton, Google Inc. and Kronos.
The SEC said there weren’t defense lawyers as yet for the newly charged.
“Today’s action reveals disturbingly corrupt
arrangements — faithless company executives who secretly pass corporate
information to hedge fund managers willing to violate the law for
profit,” said Robert Khuzami, enforcement director at the SEC.
The SEC said that Polycom senior executive Sunil Bhalla and Shammara Hussain of Market Street Partners provided the information that enabled the insider trading by Feinblatt and Yokuty, which the fund turned into $15 million in “illicit profits.”
The SEC said that Market Street Partners did work for Google. According to the SEC,
the inside information was passed from Bhalla to Roomy Khan, an
individual investor, who then passed it on to Feinblatt, Yokuty and
others.
Specifically, the information related to Google’s 2007 second-quarter earnings, Polycom’s 2005 fourth-quarter earnings and 2006 first-quarter earnings. It also related to impending takeovers of Hilton by Blackstone Group and Kronos by Hellman & Friedman.
Khan also allegedly passed information onto Galleon Group
co-founder Raj Rajaratnam. Galleon shut down its hedge funds in late
2009 and early 2010 after Rajaratnam was charged. Rajaratnam is
fighting the charges.
In total, the SEC has charged 27 defendants in its insider trading hedge fund probe. The SEC charges that managers generated “illicit profits” of roughly $69 million overall through trading in the securities of 14 companies.
The new charges comes as Gary Rosenbach, who co-founded Galleon with Rajaratnam, has launched a new firm called Rockledge Capital Management LLC.
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