Cooperman Agrees to Lighter Penalty in Deal With Trump’s SEC

Billionaire hedge fund manager Leon Cooperman described his battle against the U.S. Securities and Exchange Commission as a fight for his legacy, saying he had refused settlement offers because he did nothing wrong.
It turns out there was a price he was willing to pay to put an end to the agency’s insider-trading allegations: $4.9 million, along with no impact on his ability to keep running his hedge fund.
The SEC’s most prominent insider trading settlement since President Donald Trump took office excludes one of the agency’s harshest forms of punishment. In October, people familiar with the regulator’s position said it was demanding Cooperman accept a temporary bar from the industry — a measure that can ultimately be costlier for investing professionals than monetary penalties.
Cooperman and his firm, Omega Advisors Inc., will pay a fine and return ill-gotten gains, according to a filing in a Pennsylvania federal court. The agency originally accused him of reaping more than $4 million on trades at issue. He didn’t admit any wrongdoing in the settlement.
“I look forward to putting this matter behind me, with no restriction on my ability to invest and manage client assets, for much less than it would have cost to continue defending the case,” Cooperman said in an emailed statement.

Still, the settlement requires Cooperman to let an independent compliance consultant monitor his business with access to trading records and electronic communications until 2022. The agreement “protects against future violations,”
Stephanie Avakian, the SEC’s acting enforcement director, said in a statement posted on the regulator’s website.

Cooperman, 74 years old, has a net worth of $2.3 billion and is a fixture in financial and philanthropic circles. The son of a plumber, he bootstrapped his way from the South Bronx to become one of the deans of the hedge fund industry, founding Omega Advisors in 1991 after a 25-year career at Goldman Sachs Group Inc. He has long celebrated value investing, and in recent years was an outspoken critic of President Barack Obama and Trump’s campaign rival, Hillary Clinton.
Cooperman’s firm, which manages $3.5 billion, is among the oldest in the industry. The SEC case has taken a toll on his firm, as it oversaw about $5.4 billion at the time of the September lawsuit.

Source: Bloomberg Pro Terminal

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