FINAL JUDGEMENTS ENTERED FOR ALLEGED INSIDER TRADING OF NON-PUBLIC INFORMATION

FROM:  SECURITIES AND EXCHANGE COMMISSION 
Court Enters Final Judgment Against Officer, Broker and Relief Defendant Broker-Dealer in Settlement of Insider Trading Charges

The Securities and Exchange Commission announced today that, pursuant to settlement agreements, the Honorable Thomas L. Ludington of the United States District Court for the Eastern District of Michigan entered final judgments on January 13, 2014 against defendants Mack D. Murrell and Charles W. Adams, and relief defendant Raymond James Financial Services, Inc. (Raymond James) in the SEC's insider trading case, SEC v. Mack D. Murrell, et al., Civil Action No. 2:13-cv-12856 (E.D. Mich.). The final judgments permanently enjoin Murrell and Adams from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Murrell was ordered to pay a civil penalty in the amount of $367,250 and is prohibited from acting as an officer or director of a publicly traded company. Adams was ordered to disgorge $64,450, plus prejudgment interest of $13,285, and to pay a civil penalty in the amount of $107,046.Raymo Jndames was ordered to disgorge $373,497 plus prejudgment interest of $8,692. Without admitting or denying the SEC's allegations, Murrell, Adams, and Raymond James consented to the entry of the final judgments.

The SEC charged Murrell, who was the Vice President of Information Systems for The Dow Chemical Company (Dow), with unlawfully tipping material, non-public information to his long-time friend, David A. Teekell, in advance of Dow's July 10, 2008 announcement of its acquisition of Rohm & Haas Co. The SEC also charged Teekell and Adams, Teekell's broker at Raymond James, with trading on the confidential information. Teekell previously settled the SEC's charges.Raymond James was charged as a relief defendant because profits from certain trades by Teekell were held in its firm account.

HEDGE FUND ADVISORY FIRM AGREES TO $600 MILLION INSIDER TRADING SETTLEMENT

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., March 15, 2013 — The Securities and Exchange Commission today announced that Stamford, Conn.-based hedge fund advisory firm CR Intrinsic Investors has agreed to pay more than $600 million to settle SEC charges that it participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug being jointly developed by two pharmaceutical companies.

The SEC charged CR Intrinsic with insider trading in November 2012, alleging that one of the firm’s portfolio managers Mathew Martoma illegally obtained confidential details about the clinical trial from Dr. Sidney Gilman, who was selected by the pharmaceutical companies — Elan Corporation and Wyeth — to present the final drug trial results to the public.

The settlement filed today in federal court in Manhattan is the largest ever in an insider trading case, requiring CR Intrinsic — an affiliate of S.A.C. Capital Advisors — to pay $274,972,541 in disgorgement, $51,802,381.22 in prejudgment interest, and a $274,972,541 penalty.

"The historic monetary sanctions against CR Intrinsic and its affiliates are sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable when employees break the law to benefit the firm," said George S. Canellos, Acting Director of the SEC’s Division of Enforcement.

Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office, added, "A robust culture of compliance and zero tolerance toward employee misconduct can help other firms avoid the severe financial consequences that CR Intrinsic is facing for its misconduct."

The SEC’s complaint against CR Intrinsic, Martoma, and Dr. Gilman alleged that during phone calls arranged by a New York-based expert network firm for which Dr. Gilman moonlighted as a medical consultant, he tipped Martoma with safety data and eventually details about negative results in the trial about two weeks before they were made public in July 2008. Martoma and CR Intrinsic then caused several hedge funds to sell more than $960 million in Elan and Wyeth securities in a little more than a week.

In an amended complaint filed today, the SEC added S.A.C. Capital Advisors and four hedge funds managed by CR Intrinsic and S.A.C. Capital as relief defendants because they each received ill-gotten gains from the insider trading scheme. These ill-gotten gains are comprised of profits and avoided losses resulting from trades placed in the hedge fund portfolios that CR Intrinsic and S.A.C. Capital managed, and include fees that S.A.C. Capital received as a result of these ill-gotten gains.

The settlement is subject to the approval of Judge Victor Marrero of the U.S. District Court for the Southern District of New York. The settlement would resolve the SEC’s charges against CR Intrinsic and the relief defendants relating to the trades in the securities of Elan and Wyeth between July 21 and July 30, 2008. The settling parties neither admit nor deny the charges. The settlement does not resolve the charges against Martoma, whose case continues in litigation. The court previously entered a consent judgment against Dr. Gilman requiring him to pay disgorgement and prejudgment interest, and permanently enjoining him from further violations of the anti-fraud provisions of the federal securities laws.

The SEC’s investigation, which is continuing, has been conducted by Charles D. Riely and Amelia A. Cottrell of the SEC’s Market Abuse Unit in New York, and Matthew J. Watkins and Neil Hendelman of the New York Regional Office. The case has been supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority (FINRA).

FORMER GALLEON MANAGER SETTLES INSIDER TRADING CHARGES

The case below is an excerpt from the SEC web site:
June 17, 2011
The Securities and Exchange Commission announced today that, on May 31, 2011, The Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York entered a judgment against Adam Smith in SEC v. Adam Smith, 11-CV-0535, an insider trading case the SEC filed on January 26, 2011.
The Complaint alleged that Smith, a former portfolio manager at New York-based hedge fund investment adviser Galleon Management, LP, traded in the securities of ATI Technologies Inc., based on material nonpublic information concerning the acquisition of ATI by Advanced Micro Devices Inc. that was announced in July 2006. Prior to the announcement, Smith learned of the acquisition from an investment banker, who had received such information while serving as an employee of an investment bank that was advising one of the parties to the acquisition.
To settle the SEC’s charges, Smith consented to the entry of a judgment that: (i) permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement and prejudgment interest, for a total of $149,706.25. The judgment further provides that, based on his agreement to cooperate with the Commission, the Court is not ordering Smith to pay a civil penalty. In a related SEC administrative proceeding, Smith consented to the entry of an SEC order barring him from association with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent. Smith previously pleaded guilty to charges of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Adam Smith, 1:11-cr-00079 (S.D.N.Y.), and is awaiting sentencing.”