Leon G. Cooperman and hedge fund firm Omega Advisors reached a settlement with the Securities and Exchange Commission over charges of insider trading and beneficial ownership reporting violations, the agency announced late Thursday.
The agreement calls for the firm to pay nearly $5 million and submit to on-site monitoring by an independent compliance consultant with access to electronic communications and trading records.
By having an independent consultant monitor the firm's trading activity, “the resolution helps protect our markets from future risk of insider trading,” said Stephanie Avakian, SEC acting enforcement director, in a statement.
SEC officials filed the complaint against Mr. Cooperman and Omega Advisors in September. The agreement requires court approval.
The on-site independent consultant will be in place until 2022 as long as Omega Advisors remains a registered adviser. The consultant will recommend improvements, conduct training and report to the SEC.
The agreement also calls for monthly certifications by Mr. Cooperman and Omega that they were not aware of material non-public information prior to any securities trades, and for them to outsource beneficial ownerships filings to a law firm approved by the SEC.
The monetary sanctions include $1.76 million in disgorgement, $1.76 million in insider-trading penalties, $429,041 in interest and $1 million for the ownership reporting violations.
In an emailed statement, Mr. Cooperman said, “I look forward to putting this matter behind me, with no restriction on my ability to invest and manage client assets, for much less than it would have cost to continue defending the case.”