Short Hills Man, ‘6th Richest New Jerseyan’ Charged With Insider Trading

A former member of “New Jersey’s wealthiest men” has been accused of insider trading, the Securities and Exchange Commission (SEC) announced Wednesday.

Leon G. Cooperman and his firm Omega Advisors have been charged with insider trading “based on material nonpublic information he learned in confidence from a corporate executive,” the SEC stated.

The SEC complaint identifies the 73-year-old Cooperman as a resident of Boca Raton, Florida, as well as the president, chief executive officer and majority stockholder of Omega Advisors.

However, NJBiz recently identified Cooperman as a Short Hills resident and the 6th richest resident of the Garden State in its 2015 list of “Wealthiest New Jerseyans,” stating that he gained his estimated $3.7 billion net worth through “hedge funds.”

• See related article: 3 Short Hills Residents Rank On 'Wealthiest New Jerseyans' List

The SEC is alleging that Cooperman generated substantial illicit profits by purchasing securities in Atlas Pipeline Partners (APL) in advance of the sale of its natural gas processing facility in Elk City, Oklahoma.

“Cooperman allegedly used his status as one of APL’s largest shareholders to gain access to the executive and obtain confidential details about the sale of this substantial company asset,” the SEC stated. “Cooperman and Omega Advisors allegedly accumulated APL securities despite explicitly agreeing not to use the material nonpublic information for trading purposes, and when APL publicly announced the asset sale, its stock price jumped more than 31 percent.”

According to the SEC’s complaint, when Omega Advisors received a subpoena nearly a year-and-half later about its trading in APL securities, Cooperman contacted the executive and tried to fabricate a story to tell if questioned about this trading activity.

The executive was “shocked and angered” when he learned that Cooperman traded in advance of the public announcement, according to the SEC.

“We allege that hedge fund manager Cooperman, who as a large APL shareholder obtained access to confidential corporate information, abused that access by trading on this information,” SEC Division of Enforcement Director Andrew Ceresney said. “By doing so, he allegedly undermined the public confidence in the securities markets and took advantage of other investors who did not have this information.”

The SEC’s complaint also charges Cooperman with “failing to timely report information about holdings and transactions in securities of publicly-traded companies that he beneficially owned,” alleging that he violated federal securities laws more than 40 times.

The SEC’s complaint was filed in federal district court in Philadelphia and seeks disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctions against Cooperman and Omega Advisors as well as an officer-and-director bar against Cooperman.

However, as of Wednesday, the SEC’s civil lawsuit has not been accompanied by criminal charges from the U.S. Department of Justice, Bloomberg News reported.

‘DESTROYING HIS LEGACY'

Following the SEC’s accusations, the billionaire reportedly issued a five-page letter to clients denying wrongdoing and stating that he plans to fight insider trading charges.

Bloomberg Markets stated that Cooperman spoke to the firm’s clients via a conference call on Wednesday and said that “we could have settled this matter with the SEC for an amount which is far less than what I donate to charity every year, but I refuse to do so because of my belief that we acted appropriately and lawfully.”

“It took me 50 years of hard work and playing by the rules to get where I got and I’m not going to let these people destroy my legacy,” Cooperman reportedly said.

Cooperman’s name appears on multiple Essex County institutions and foundations due to his philanthropic efforts in the region, including a $25 million grant from the Leon and Toby Cooperman Family Foundation to help finance a $250 million expansion at St. Barnabas Medical Center in Livingston.

• See related article: St. Barnabas Medical Center Breaks Ground on $250 Million Expansion
• See related article: Coopermans Pledge $250,000 to ECLC of New Jersey's Program for Adults with Special Needs

According to Election Law Enforcement Commission records, Cooperman has donated to Republican and Democrat political candidates in New Jersey including Jon Corzine, Christie Whitman, Thomas Kean, Jim Courter and Cory Booker.

Photo: Patch file photo

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