The U.S. Securities and Exchange Commission (SEC) brought more charges Friday as part of its ongoing investigation into expert networks and hedge fund trading.
The SEC charged South Pasadena, Calif.-based wealth management company Whittier Trust Co. and a former fund manager, Victor Dosti, with insider trading.
It alleges that Dosti generated profits and avoided losses for funds he managed by trading on confidential information about technology companies, Dell, Nvidia Corp., and Wind River Systems.
The SEC says he obtained the inside information from Danny Kuo, another fund manager that Dosti supervised. Kuo was charged by the SEC in January 2012 and is currently cooperating with the investigation.
Whittier Trust and Dosti agreed to pay nearly US$1.7 million to settle the charges, without admitting or denying the allegations. The settlements are subject to court approval and would permanently enjoin Whittier Trust and Dosti from future violations of federal securities laws.
“Time and again, Dosti received what he knew was inside information from Kuo and traded on it to generate illicit gains for the funds he managed,” said Sanjay Wadhwa, senior associate director of the SEC’s New York Regional Office. “Now, he and Whittier Trust join a long list of insider trading perpetrators who have been held accountable by the SEC for their transgressions.”
The SEC reports that it has charged more than three dozen individuals and firms in enforcement actions arising out of its expert networks investigation, which has uncovered widespread insider trading at several hedge funds and other investment advisory firms.