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Archive for May, 2013

Path cleared for Whistleblower to sue UBS

UBS AG lost a bid Tuesday to dismiss a whistle-blower lawsuit by a former commercial mortgage-backed securities strategist who said he was fired for refusing to publish misleading research reports. U.S. District Judge Jesse Furman in Manhattan found that Trevor Murray, who was fired in February 2012, could move forward with his case. Murray alleges that after he complained to superiors, the Swiss bank retaliated against him in violation of the Dodd-Frank Act. The ruling was one of a handful to date to address the scope of the whistleblower provisions of Dodd-Frank, the 2010 law enacted in response to the U.S. financial crisis. UBS argued the Dodd-Frank whistleblower provisions did not apply to Murray as he only complained to people at UBS and not the U.S. Securities and Exchange Commission.  But Furman cited rules adopted by the SEC in 2011 interpreting the Dodd-Frank law as extending the law’s anti-retaliation provisions to protect individuals whose disclosures were made under the earlier Sarbanes-Oxley Act, regardless of if the person complained to the SEC itself. “Applying this analysis here, the Court concludes that deference to the SEC’s rule is warranted,” Furman said. 



SAC executives are received subpoenas

Four senior executives at Steven Cohen’s SAC Capital Advisors LP received subpoenas as part of the U.S. multiyear probe into insider trading at the hedge fund firm, a person with knowledge of the matter said. Subpoenas were sent to Tom Conheeney, president of SA; Steve Kessler, head of compliance; and Phillipp Villhauer, head trader. A fourth executive, Chief Operating Officer Solomon Kumin, also received a subpoena, the person said later. 

Cohen, SAC’s billionaire founder, was sent a subpoena last week to appear before a federal grand jury. After Cohen was summoned, SAC Capital told clients in a May 17 letter that it was no longer cooperating unconditionally with the government and it would no longer be updating clients on the matter. The firm expects “substantially more clarity” in coming months, according to the letter, portions of which were provided to Bloomberg News. The Wall Street Journal reported the executive subpoenas today. Conheeney joined SAC in 1999 and was made president in 2008, while Kessler started in 2005, according to fund documents. […] Villhauer helped SAC make or avoid losses of $276 million on trades that led to the arrest of former portfolio manager Mathew Martoma for alleged insider trading, two people familiar with the matter said in November. Martoma has denied wrongdoing. The U.S. has already linked at least nine current or former employees to allegations of insider trading while at SAC Capital.

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