New York (HedgeCo.Net) – The SEC charged seven Wall Street professionals yesterday, alleging an insider trading ring that reaped over $11.6 million in illegal profits.

British residents Nicos Achilleas Stephanou of UBS and Ramesh Chakrapani of Blackstone Advisory Services are being accused of disclosing nonpublic information about pending corporate acquisitions to five other finance professionals, including hedge fund manager Joseph Contorinis of Jefferies & Company.

“It is unconscionable when these highly paid individuals abuse their access to sensitive information and enrich themselves at the expense of others," said Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement.

According to the complaint, the illegal trading took place from at least November 2005 until December 2006.  Companies in which private information was dispersed include Albertson’s, ElkCorp and National Health Investors.

Achilleas Stephanou, George Paparrizos, Konstantinos Paparrizos and Michael G. Koulouroudis were also named in the complaint.

With public outcry against the SEC at an all-time high in lieu of the handful of recent fraud cases, the agency is vamping up its efforts to investigate and expose corrupt practices.

“Market professionals who may have engaged in insider trading, or may be tempted to, cannot rest comfortably in the belief that their wrongdoing will go undetected,” said Daniel M. Hawke, Director of the SEC’s Philadelphia Regional Office.

In addition to the charges brought on by the SEC, Sephanou, Contorinis, Koulouroudis and George Paparrizos will face criminal charges in New York state.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: accredited-investors, amp-company, british residents, chakrapani, corporate acquisitions, corrupt practices, elkcorp, finance professionals, fraud cases, hedge-fund-manager, hedgeco, illegal-profits, insider trading, konstantinos, market professionals, national health investors, philadelphia regional office, public outcry, wall street professionals

New York (HedgeCo.Net) – A Blackstone Group executive has been sued by the U.S. Securities and Exchange Commission after allegedly fronting an insider trading scam that involved supermarket chain Albertsons.

According to the complaint, Managing Director Ramesh Chakrapani tipped off a friend with private information regarding the acquisition of Albertsons in 2006 by private equity firm Cerberus, before it was announced to the public.  The SEC alleges Chakrapani’s actions raked in about $3.6 million in illegal profits.  

“We are shocked by this alleged breach of the law and violation of our own compliance policies and ethical standards,” said Peter Rose, spokesman for Blackstone.

The original acquisition, valued at $17.4 billion, included splitting up the Albertsons stores between a consortium of buyers, including Supervalu, drugstore chain CVS and the New York-based Cerberus. 

At that time, Albertson’s Inc. was the nation’s second-largest supermarket chain.  The SEC is alleging that the Blackstone team, led by Chakrapani, advised Albertson’s on the deal.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: accredited-investors, albertson, albertsons, blackstone group, compliance policies, cvs, drugstore chain, group executive, hedgeco, illegal-profits, insider trading, private equity firm, private equity firm cerberus, securities-and-exchange-commission, sister-sites, supermarket chain, supervalu

The Lowell Sun – A Burlington hedge fund and its former manager have agreed to pay more than $1 million for trading on inside information surrounding the Citizen Bank’s $10.5 billion purchase of Chapter One.

Federal regulators from the U.S. Securities and Exchange Commission announced a settlement with Global Time Capital Management and former chief Michael Tom, of Waltham, over trades made about six days before the 2004 Citizens Bank deal with Charter One.

Tom has agreed to surrender $801,000 in profits, penalties and interest, while Global time Capital and its GTC Growth Fund will pay an additional $252,000.

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