In November 2010, the FBI executed a search warrant related to insider trading allegations at David Ganek’s Level Global hedge fund offices. Although Mr. Ganek was never charged with a crime, clients fearful of being linked to misconduct quickly withdrew funds, and the fund was promptly closed.
Hedge Fund Accuses U.S. of Misconduct
Citigroup Sells Subprime Lender to Springleaf
Citigroup has announced the sale of its consumer lending unit, OneMain Financial, to Springleaf Holdings for $4.25 billion. Citigroup Chief Executive Officer Michael Corbat has called OneMain “a terrific business” after the subprime lending unit turned profitable after difficult times throughout the global financial crisis (GFC). However, Mr. Corbat felt the business did not fit “the Citi model,” as the firm wants to focus on providing banking services to more affluent customers in the United States.
Valeant Triumphs Over Rivals in Pharmaceutical M&A Battle
The year 2014 saw $3.5 trillion in merger and acquisition (M&A) transactions, the most since 2008, and according to KPMG data, this year could be even bigger. The highly acquisitive Canadian pharmaceutical company, Valeant (VRX), recently added to 2015’s already growing total by entering a deal to purchase Salix Pharmaceuticals (SLXP) for a total value of $14.6 billion. (more…)
A 587 Million Dollar Stake
At the start of the month, Sunac China Holdings Limited took a risk and bought 2.54 billion shares giving them a 49.3 percent stake in the struggling Chinese developer, Kaisa Group Holdings Ltd. The large stake cost Sunac over $587 million, with shares at roughly $1.80, according to the Hong Kong stock exchange. This deal has made Sunac the largest shareholder in Kaisa.
Insider Trading Requirements: Second Circuit Case could have Major Consequences for Prosecutors
In the context of insider trading cases involving tippers, the personal benefit test is most controversial. To hold a tippee liable, prosecutors are required to prove the tippee’s knowledge of the personal benefit of the tipper when revealing the tip. On December 10, 2014, the United States Court of Appeals for the Second Circuit heightened the benefit requirement, which could have a major impact on insider trading cases to come.