Insider trading cases often have focused on “the CEO’s brother-in-law” or similarly situated individuals who used a tidbit passed along at Thanksgiving dinner to make a quick and easy personal profit. Today, hedge funds have joined “the CEO’s brother-in-law” as the target of insider trading cases. In the hedge fund context, charges are being based on a hedge fund employee’s collection of information as part of the employee’s job in trading the hedge fund’s assets, unlike the classic cases based upon receipt of an isolated “tip” outside of the work setting that will be used to generate profit for an individual.Evidence tying the trades to “insiders” — the source for inside information about Akamai was an Akamai executive; the source for the inside information about Clearwire was an executive at a company that was investing in Clearwire. Evidence tying the trades to the “inside information”:One hedge fund trader asked another hedge fund principal, “if the two of us weren’t close to the company as we are, would you be long the [AMD] stock?” The hedge fund principal replied, “Yeah, no. I wouldn’t.” The hedge fund trader then said that she “wouldn’t of touch[ed] it with a … 10-foot pole.” One hedge fund trader asked the Managing Director at… Read full this story
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