U.S. Judge defers ruling on dismissal of Cooperman insider trading case

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By Suzanne Barlyn

<span class="articleLocation”>A U.S. judge in Philadelphia on Tuesday delayed
ruling on whether to throw out an insider trading case against
billionaire Leon Cooperman and his firm, Omega Advisors in an
ongoing crackdown on illegal trading at hedge funds.

U.S. District Judge Juan Sánchez, following roughly 90
minutes of oral arguments by lawyers for Cooperman and the U.S.
Securities and Exchange Commission said he would take the matter “under advisement.” In December, lawyers for Cooperman and Omega
had filed a motion to dismiss the SEC’s case.

The oral arguments followed a civil complaint by the SEC
last September, charging the 73-year-old stock picker and his
multi-billion-dollar firm with illegal trading in Atlas Pipeline
Partners GP LLC (APL) in 2010 ago after they found out about the
planned sale of a unit.

The decision by Judge Sánchez could set a legal precedent
about the responsibilities that individuals who work outside of
a publicly-traded company have toward that company when making
an agreement to keep confidential company details under wraps.
The timing of such agreements is also an issue in the case.

“You are going to be the first judge to address this precise
set of facts,” said Bridget Fitzpatrick, an SEC lawyer who
argued on behalf of the agency that the case should continue.

The SEC has argued that Cooperman “misappropriated”
information from an Atlas executive about the sale of the Atlas
Pipeline unit. He is said to have made about $4 million from his
trading on Atlas related to the sale of its unit.

Cooperman’s lawyers want the case thrown out arguing that he
may have “broken a promise,” if indeed he agreed not to trade on
the information, but that he had not broken insider trading
laws.

The SEC’s allegations, if proven true, would been a stain on
Cooperman’s legendary career spanning five decades. Cooperman,
the son of a plumber in the Bronx who founded Omega in 1991, is
regarded as one of the industry’s best known stock-pickers.

APL was bought by a unit of Targa Resources Corp (TRGP.N) in
early 2015.



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