Billionaire hedge fund manager Leon Cooperman received permission from U.S. regulators to keep raising money from outside investors, a privilege that was put at risk when he settled insider-trading allegations last week.
The U.S. Securities and Exchange Commission granted Mr. Cooperman and his firm, Omega Advisors, a waiver from punishments that automatically kick in when individuals settle enforcement actions. Absent the waiver, it would have been extremely difficult for Mr. Cooperman to raise capital for investment funds he manages.
Mr. Cooperman, who has a net worth of $2.3 billion, agreed to pay $4.9 million on May 18 to resolve allegations that he used his status as one of the largest investors in an energy company to obtain confidential information from an executive who wasn't named. He didn't admit or deny the SEC's claims.
After the SEC sued Mr. Cooperman last year, the 74-year-old initially said he wouldn't pay any penalty because he did nothing wrong. He agreed to the accord after the regulator dropped its demand that he face an industry suspension. The settlement does require Mr. Cooperman to let an independent compliance consultant monitor his business with access to trading records and electronic communications until 2022.
The SEC had traditionally dropped automatic penalties that were triggered as part of enforcement settlements. But in recent years, the issue has become more of a flashpoint with some agency officials arguing that it wasn't appropriate to grant waivers to companies that seem to get in trouble again and again.