Private Equity Insider Trading

Looking at Recent Private Equity Insider Trading Cases

Last week, the SEC filed charges of insider trading against seven individuals including Ronald Yee, former CFO at ValueAct Capital and Chen Tang, former employee at Friedman Fleischer & Lowe (a San Fransisco buyout firm).

Tang and Yee, who are brothers-in-law, along with the others in the case, allegedly made nearly $2 million in profit from trading Tempur-Pedic shares, and $6 million from trading shares of Acxiom, based on information they obtained by virtue of their employment at Friedman Fleischer and ValueAct, respectively, according to the SEC. Lawyers for the two said they will fight the charges. Neither of the firms where the two worked are implicated in the case - indeed, the SEC appears to have bent over backwards examining their ethics and compliance policies. Friedman Fleischer sent a firm-wide email advising of a trading blackout in Tempur-Pedic as the firm considered that deal, while the SEC said ValueAct has ethics and insider trading policies that Yee had certified he understood several times.  Source

While insider trading is not common in the buyout world there is a history of some private equity individuals profiting off inside information.  The Journal has provided a brief history of insider trading in private equity which includes Hilton Hotels Corp, Albertson’s Inc., TXU Corp., Petco Animal Supplies Inc and others.  See the article here.


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Tags: Private Equity Insider Trading, Private Equity Insider Trading cases, private equity SEC, securities and exchange buyouts, buyout insider trading

Link to This Resource: Private Equity Insider Trading

http://privateequityblogger.com/2009/11/private-equity-insider-trading.html