A former portfolio manager at the hedge fund investment advisory firm Galleon Management has settled insider trading charges with the Securities and Exchange Commission for nearly $150,000.
U.S. District Court Judge Jed S. Rakoff entered a judgment against Adam Smith in the insider trading case on Friday, which the SEC filed on Jan. 26, 2011.
The SEC complaint alleged that Smith, a former portfolio manager at Galleon, traded in the securities of ATI Technologies Inc., based on material nonpublic information concerning the acquisition of ATI by Advanced Micro Devices Inc., which was announced in July 2006. Prior to the announcement, Smith learned of the acquisition from an investment banker, who had received the 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: permanently enjoins him from future violations of the securities laws and orders him to pay disgorgement and prejudgment interest toaling $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 and is awaiting sentencing.
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