While Mr. Cooperman was accused of making millions on insider trading. Sheren Tsai made $23,914.41 on her illegal trades. The relatively small amount of the gains caught my eye in the press release, but a particular line in the pleadings made me think it was worth highlighting.
Ms. Tsai was (is?) in a romantic relationship with Colin Whelehan. Both worked at different investment advisory firms. Mr. Whelehan was involved in a significant corporate event. He told this material non-public information to Ms. Tsai. She bought stock in the target company and made the above-mentioned $23,914.41 in profits.
The pleading that caught my eye was the statement about personal benefit:
“25. As a result of his tip, Whelehan received a personal benefit in the form ova gift to his closest personal friend, his live-in girlfriend and romantic partner, Tsai.”
Clearly, the SEC is trying to sort the law out in the post-Newman world.
Then there is the insider trading catch.
Ms. Tsai’s compliance group noticed the trades in her account. Clearly it looked strange to have the purchase so close to the announcement and spike in price. Most insider trading platforms will flag that trade.
The compliance group also had Ms. Tsai’s emails. Mr. Whelehan had sent an email from his work email to her work email writing in part:
“one of Apollo’s portfolio companies would be buying out ADT.”
Ms. Tsai later sent a message using her work email
“So when is it [target’s stock price] going to BOUNCE”
Both had compliance training and knew about insider trading. They are caught as about red-handed as you can get for insider trading.
Sources:
- Securities and Exchange Commission v. Colin Whelehan and Sheren Tsai press release
- SEC Complaint
- Boy Meets Girl, Boy Gives Inside Information to Girl, SEC Says by Christian Berthelsen