Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Omega Advisors and Leon Cooperman Settle SEC Charges
- Client News
- May 18, 2017
Practices
After a six-year investigation, Paul, Weiss clients Omega Advisors, Inc. and Leon Cooperman agreed to settle claims filed by the Securities and Exchange Commission based on allegations of insider trading and late filings of statements of beneficial ownership. The parties’ settlement—which is currently pending approval in the U.S. District Court for the Eastern District of Pennsylvania —does not involve any admissions of wrongdoing, requires disgorgement of less than half of the alleged trading gain, and in a significant break from SEC precedent, does not include any bar or suspension. As publicly reported, the SEC had previously insisted on a five-year industry bar.
The SEC’s complaint arose from an investigation relating to trading in securities of Atlas Pipeline Partners, L.P., in July 2010 in advance of Atlas’ announcement later that month that the company was selling a natural gas processing facility in Oklahoma. In September 2016, the SEC filed a complaint against Omega and Mr. Cooperman in federal court in Philadelphia asserting three claims: an insider trading claim based on Omega’s and Mr. Cooperman’s trading in Atlas in July 2010 and two claims alleging that Mr. Cooperman had filed late statements of beneficial ownership concerning his investments in several public companies. The insider trading claim alleged that Mr. Cooperman spoke several times by telephone with a senior Atlas executive in July 2010, that the executive told Mr. Cooperman about the impending sale of the facility, and that Mr. Cooperman agreed to keep that information confidential.
Paul, Weiss moved to dismiss the insider trading allegation for failure to state a claim because the SEC did not assert that the alleged promise not to trade preceded the company's disclosure of the facility’s sale. We also sought dismissal of the beneficial ownership claims for improper venue. In March 2017, U.S. District Judge Juan R. Sánchez dismissed benefical ownership claims, but sustained the insider trading claim. However, he noted that the SEC’s insider trading theory presented a “novel issue” that “no court has squarely addressed.” The case settled while Omega's motion for interlocutory review was pending.
The Paul, Weiss team handling the matter included partners Daniel Kramer, Ted Wells, Udi Grofman, David Huntington, Richard Tarlowe and Gregory Laufer.