The SEC has charged former TPG Capital L.P. associate Vinayak Gowrish and former Lazard Freres & Co. LLC vice president and investment banker Adnan Zaman with orchestrating an insider trading scheme. The scheme involved the two aforementioned individuals stealing confidential merger and acquisition information from their former employers and passing it along to two friends who then executed favorable trades.
The friends, Sameer N. Khoury and Pascal S. Vaghar, traded stocks and options based on this nonpublic information and in the process generated almost $500,000. Gowrish and Zaman benefitted from this relationship in the form of kickbacks including free rent and cash.
The activities were shielded from the SEC and other regulatory bodies through a system concocted by the four to evade regulatory measures. The four developed a system of coded text messages and also passed along sensitive information through the use of sticky notes. Despite their measures to the contrary, all four now face charges of violating Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3.
Three of the four, Zaman, Vaghar, and Khoury, have offered to settle with full injunctive relief and disgorgement. Also, Zaman will be permanently barred from associating with any broker or dealer. Gowrish, however, has yet to settle, and the SEC is seeking the imposition of fines and penalties against him.
No comments:
Post a Comment