The Securities and Exchange Commission (SEC) has charged a California-based wealth management company and a former fund manager with insider trading on non-public information about technology companies.
The charges are the agency’s latest in its ongoing investigation into expert networks and hedge fund trading.
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The SEC alleges that Whittier Trust Company and fund manager Victor Dosti participated in an insider trading scheme involving the securities of Dell, Nvidia Corporation, and Wind River Systems. Dosti generated profits and avoided losses for funds he managed at Whittier Trust by trading on confidential information that he obtained from Danny Kuo, a Whittier Trust fund manager who 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.
"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 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. The first series of charges were brought in 2011.
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By GlobalDataDosti agreed to pay disgorgement of US$77,900.00 plus prejudgment interest of US$2,951.43, and a penalty of US$77,900.00. The settlements are subject to court approval and would permanently enjoin Whittier Trust and Dosti from future violations of the antifraud provisions of the federal securities laws.
Whittier Trust and Dosti neither admit nor deny the SEC’s charges.
