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Alternative Market Briefing

Sigma Capital to settle SEC insider trading charges with $14m

Monday, March 18, 2013

Benedicte Gravrand, Opalesque Geneva: - The U.S. Securities and Exchange Commission (SEC) announced today (March, 15) that New York-based hedge fund advisory firm Sigma Capital Management had agreed to pay nearly $14m to settle charges that the firm had engaged in insider trading. Indeed the firm allegedly traded on early information obtained by one of the firm’s analysts about quarterly earnings for Dell and Nvidia Corporation.

In a complaint filed today along with the proposed settlement in federal court in Manhattan, the SEC also charged Sigma Capital in the insider trading scheme and named two affiliated hedge funds – Sigma Capital Associates and SAC Select Fund (an affiliate of SAC Capital) – as relief defendants that unjustly benefited from Sigma Capital’s violations, says the announcement.

This results from the SEC’s ongoing investigation into expert networks and hedge funds that use them.

In this instance, Jon Horvath, a former analyst at Sigma Capital, was charged and agreed to a settlement earlier this month.

Apparently, Horvath provided Sigma with non-public details of quarterly earnings at Dell and Nvidia, which he’d learned in discussions with a group of hedge fund analysts. Sigma then traded Dell and Nvidia stocks ahead of the earnings announcements in 2008 and in 2009, and made gains of $6.2425m from those trades, the SEC says.

On the radar

The SEC’s inv......................

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