{"id":5391,"date":"2012-12-13T00:00:00","date_gmt":"2012-12-13T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/12\/insider_trading_headlines_hedg"},"modified":"2022-05-02T11:10:15","modified_gmt":"2022-05-02T16:10:15","slug":"insider-trading-headlines-hedg","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/","title":{"rendered":"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again"},"content":{"rendered":"

Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever<\/strong>
\nProsecutors have unsealed a criminal complaint in what is being called an insider trading<\/a> scam that lacks historical precedent involving the \u201cmost lucrative inside tip of all time.\u201d Ex-hedge fund manager Mathew Martoma allegedly made or avoided losses of $276M when trading securities in pharmaceutical companies Wyeth and Elan Corp. plc.<\/p>\n

The insider information related to the potential ineffectiveness of an Alzheimer drug clinical that both companies were working on, which consultant Sidney Gilman allegedly provided to Martoma, is purportedly the reason that the former hedge fund manager liquidated his funds\u2019 long position (about $700M) in the two companies and took short positions instead. Martoma, advisory firm CR Intrinsic Investors LLC, and an affiliated adviser allegedly avoided $194M in losses and $82M in profits when the drug trial results were made public and the companies\u2019 stock dropped. The SEC has filed a parallel civil case against Martoma, CR Intrinsic Investors, and Gilman.<\/p>\n

Ex-Real Estate Director & Tippee Friend in Merger Targets Must Face SEC Charges<\/strong>
\nEx-Royal Philips real estate director Ralph J. Pirtle Ralph J. Pirtle and his friend Berco Realty President Morando Berrettini do, indeed, have to face Securities and Exchange Commission insider trading charges. The SEC had filed charges against them in 2008 because Pirtle allegedly provided Berrettini with insider information that came from the due diligence he was conducting for Royal Philips about possible merger targets. Berrettini then allegedly used the tips to trade in the stocks of three of the companies under consideration and he made \u201csubstantial profit\u201d when two of them were acquired.<\/p>\n

The defendants\u2019 countered that in filing its case the SEC did not provide evidence that would cause a jury to find that Berrettini benefited from the insider information. However, Judge Robert M. Dow Jr. of the U.S. District Court for the Northern District of Illinois says that the SEC did adequately allege its claims elements and the insider trading charges will stand.<\/p>\n

Criminal Liability of Secondary Tippees Gets Court Clarification Again<\/strong>
\nWhen is a secondary tippee criminally liable for insider trading? Holding the conclusion made earlier this year by Federal Judge Jed Rakoff, the U.S. District Court for the Southern District of New York said that it is when that tippee had a \u201cgeneral understanding\u201d that the information received came from an insider who breached a confidentiality duty for personal benefit.<\/p>\n

The court rulings involved jury instructions in the criminal case against hedge fund manager Doug Whitman, who was convicted on securities fraud <\/a>and conspiracy charges related to tips he received from tippees that got their information from the employees of three public companies. The court found that in addition to having this \u201cgeneral understanding,\u201d a secondary tippee such as Whitman does not have to know the specifics of the breach or the benefits that the insider obtained to be held criminally liable. He\/she, however, must have had a \u201cspecific intent\u201d to defraud the company that the information is related to of that data\u2019s confidentiality.<\/p>\n

SEC Charges Former Corporate Director of Real Estate and Real Estate Broker For Insider Trading<\/a>, SEC, April 1, 2010<\/p>\n


\nMore Blog Posts:<\/strong>
\nTexas Securities Case: Mark Cuban Asks District Court To Reconsider Compelling the SEC to Produce Documents Related to Insider Trading Allegations Over Mamma.com Stock Offering<\/a>, Stockbroker Fraud Blog, June 19, 2012<\/p>\n

Insider Trading Roundup: SEC Settlement Reached Over Alleged Tips In Insurers\u2019 Merger, Court Won\u2019t Throw Out Criminal Charges Related to Info From AA Member, & Asset Freeze Approved Against Broker In Burger King Acquisition<\/a>, Stockbroker Fraud Blog, September 28, 2012<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever Prosecutors have unsealed a criminal complaint in what is being called an insider trading scam that lacks historical precedent involving the \u201cmost lucrative inside tip of all time.\u201d Ex-hedge fund manager Mathew Martoma allegedly made or avoided losses of $276M when trading securities in pharmaceutical companies […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3748,3811],"tags":[],"class_list":["post-5391","post","type-post","status-publish","format-standard","hentry","category-hedge-funds","category-insider-trading"],"yoast_head":"\nInsider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again — Investor Lawyers Blog — December 13, 2012<\/title>\n<meta name=\"description\" content=\"Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever Prosecutors have unsealed a criminal complaint in what is being called an insider trading scam that — December 13, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again — Investor Lawyers Blog — December 13, 2012\" \/>\n<meta name=\"twitter:description\" content=\"Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever Prosecutors have unsealed a criminal complaint in what is being called an insider trading scam that — December 13, 2012\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards & Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again — Investor Lawyers Blog — December 13, 2012","description":"Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever Prosecutors have unsealed a criminal complaint in what is being called an insider trading scam that — December 13, 2012","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/","twitter_card":"summary_large_image","twitter_title":"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again — Investor Lawyers Blog — December 13, 2012","twitter_description":"Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever Prosecutors have unsealed a criminal complaint in what is being called an insider trading scam that — December 13, 2012","twitter_misc":{"Written by":"Shepherd Smith Edwards & Kantas, LLP","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/#article","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/"},"author":{"name":"Shepherd Smith Edwards & Kantas, LLP","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"headline":"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again","datePublished":"2012-12-13T06:00:00+00:00","dateModified":"2022-05-02T16:10:15+00:00","mainEntityOfPage":{"@id":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/"},"wordCount":651,"articleSection":["Hedge Funds","Insider Trading"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/","url":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/","name":"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again — Investor Lawyers Blog — December 13, 2012","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#website"},"datePublished":"2012-12-13T06:00:00+00:00","dateModified":"2022-05-02T16:10:15+00:00","author":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"description":"Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever Prosecutors have unsealed a criminal complaint in what is being called an insider trading scam that — December 13, 2012","breadcrumb":{"@id":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.investorlawyers.com\/blog\/insider-trading-headlines-hedg\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.investorlawyers.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Insider Trading Headlines: Hedge Fund Manager Named in \u201cMost Lucrative Tip\u201d Ever, Ex-Real Estate Director & Friend Accused of Sharing Tips in Merger Targets Must Face SEC Charges, & Matter of Criminal Liability of Secondary Tippees is Clarified Again"}]},{"@type":"WebSite","@id":"https:\/\/www.investorlawyers.com\/blog\/#website","url":"https:\/\/www.investorlawyers.com\/blog\/","name":"Investor Lawyers Blog","description":"Published By Investment Fraud Attorneys \u2014 Shepherd Smith Edwards & Kantas, LLP","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.investorlawyers.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431","name":"Shepherd Smith Edwards & Kantas, LLP","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","caption":"Shepherd Smith Edwards & Kantas, LLP"},"sameAs":["https:\/\/www.investorlawyers.com\/"]}]}},"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pedX9K-1oX","_links":{"self":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=5391"}],"version-history":[{"count":3,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5391\/revisions"}],"predecessor-version":[{"id":27059,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5391\/revisions\/27059"}],"wp:attachment":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=5391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=5391"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=5391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}