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SEC charges Mark Megalli, former Level Global hedge fund trader, with insider trading

Friday, November 15, 2013

Benedicte Gravrand, Opalesque Geneva:

The U.S.í Securities and Exchange Commission (SEC) charged Mark Megalli, a New-York based investment professional with insider trading. Megalli allegedly used non-public information about Carterís Inc., a youth clothing company, to give the hedge fund firm he worked for, now defunct-Level Global Investors L.P., a $3.2m trading edge.

Megalli apparently got inside information from the former vice president of investor relations at Carterís, Eric Martin. Martin has already been charged by the SEC with insider trading too. Martin at the time of the deed, had already left Carterís and was running his own consulting firm, while maintaining contact with a company insider who supplied him with information on Carterís moves.

Megalli joined Level Global as head of its consumer sector in August 2009 and entered into the consulting agreement with Martinís firm a month later.

"Megalli enabled hedge fund Level Global Investors L.P. to avoid approximately $2.4 million in losses and make $853,655 in illicit profits by trading shares ahead of positive or negative news," says the SEC announcement.

It was said that sometimes, Megalli would conduct trades while still on the phone with his source, and would brag about being 'max shortí in advance of negative news to his colleagues.

The SECís civil complaint charges Mega......................

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