Private Equity Consultant Charged with Insider Trading in Acquisition Target
The SEC has charged a consultant for a private equity firm with insider trading for buying shares of a public company being considered for acquisition. The defendant consulted with the PE firm to evaluate acquisition opportunities. As alleged by the SEC, the defendant purchased shares of the publicly-traded target about two months before the acquisition was announced. The SEC charges that knowledge that his employer was considering an acquisition was material nonpublic information, as evidenced by the increase in the stock price after the PE firm announced the acquisition.
OUR TAKE: These are the types of issues that newly-registered PE firms must address in Codes of Ethics and insider trading policies. Firms should consider an outright ban on personal investing in companies targeted or held by private equity funds.
Posted by Todd Cipperman at 3/28/2011 7:50 AM 
Categories: Compliance and Operations
Tags: private equity insider trading portfolio company
Categories: Compliance and Operations
Tags: private equity insider trading portfolio company
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