Skip to main content

Lucky 7: The Insider-Trading Schemes That Paid the Most

As everybody knows, insider trading is the easiest way to make big bucks in the stock market. Here are some of the celebrated cases of alleged insider trading worldwide:-

1) Mathew Martoma: The hedge fund manager is charged with trading on inside information from a doctor who was working on a joint-drug trial with Elan Corp. and Wyeth on the development of an Alzheimer’s drug. Based on the information, Mr. Martoma led his firm CR Intrinsic and an affiliated investment adviser to liquidate their positions in both companies and to take short positions, according to prosecutors and SEC attorneys.

All told, the hedge funds allegedly made profits and avoided losses of more than $276 million, according to U.S. officials. Mr. Martoma’s attorneys said in a statement, “Mathew Martoma was an exceptional portfolio manager who succeeded through hard work and the dogged pursuit of information in the public domain.”

2) Raj Rajaratnam: His remarkable journey from Sri Lanka to the heights of the hedge-fund world to convicted felon ended in October 2011 when he was sentenced to 11 years in prison, then the longest-ever term imposed in an insider-trading case. Prosecutors said Mr. Rajaratnam, founder of Galleon Group, reaped $72 million in illegal profits and losses avoided from his insider trading. Mr. Rajaratnam’s lawyers argued that only about $7.46 million in alleged gains shouldhave been attributed to him personally.

3) Todd Newman: A former portfolio manager with Diamondback Capital Management LLC, who is currently on trial with Anthony Chiasson, a co-founder of Level Global Investors LP, for allegedly sharing and trading on confidential information about technology stocks. About $70 million in profits was made in the alleged scheme, according to prosecutors. Messrs. Newman and Chiasson have pleaded not guilty to conspiracy and securities fraud charges.

4) Ivan F. Boesky: The inspiration for Wall Street’s Gordon Gekko, Mr. Boesky was sentenced to three years in prison in 1987 for conspiring to file false stock trading records. A year earlier, he had settled civil insider-trading charges with the SEC, paying a record $100 million. The SEC said he earned more than $50 million by trading inside information he bought from an investment banker.

5) Matthew Kluger: A former corporate lawyer who profited from his inside knowledge of corporate deals handled by the law firms he worked for over a 17-year period. Mr. Kluger was sentenced in June to 12 years in prison, the current record sentence in an insider-trading case. Garrett Bauer, a 44-year-old former trader who received Mr. Kluger’s tips through a middleman, pleaded guilty in the scheme and was sentenced to nine years in prison. The scheme netted the participants $32 million in profits, the bulk to Mr. Bauer, prosecutors said.

6) Joseph “Chip” Skowron III: He was sentenced to five years in prison in November 2011 after admitting to using secret tips from a French doctor working on clinical-drug trials to avoid millions of dollars in trading losses. (Sound familiar?) A former manager at hedge fund FrontPoint Partners, Mr. Skowron directed several FrontPoint health-care funds to dump millions of dollars of shares in biotechnology company Human Genome Sciences Inc. in 2008 based on the inside information. 

He avoided about $30 million in trading losses, prosecutors said.

7) Zvi Goffer: A former employee at Galleon whom prosecutors called the “ringleader” of an insider-trading scheme involving traders and lawyers, Mr. Goffer was sentenced to 10 years in prison in 2011 after being found guilty of 14 counts of conspiracy and securities fraud. His brother Emanuel Goffer and Michael Kimelman, who were both traders, were each convicted of conspiracy and two counts of securities fraud. In a related civil complaint, the SEC said one part of the scheme, based on tips from corporate lawyers, netted more than $20 million in illegal profits

Remember that these are the once which have come out into public domain. There are hundreds which never get caught.

http://profit.ndtv.com/news/banking-finance/article-state-run-foreign-banks-hit-by-bad-loans-rbi-313160

Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more