SEC Settles with Pequot Capital Management for insider trading and nobody goes to jail, just write a $28 million check

IF ANYONE thinks the equity market is fair and equitable, they need their head examined! Insider trading if you are one of the Wall Street elite; no problem just write the SEC a check and they might even take plastic if you are seeking frequent flyer miles. May 27, 2010, NO FINANCIAL REFORM and the Wal Street clan simply continues to transfer funds to the SEC!

May 27 (Bloomberg) -- Pequot Capital Management Inc. and the hedge-fund firm’s founder, Arthur Samberg, will pay almost $28 million to settle regulatory claims they illegally tapped information from a Microsoft Corp. employee to bet on the software maker’s stock in 2001.

Samberg, who said last year he was winding down what was once the world’s biggest hedge fund, agreed to be barred from working as an investment adviser, the Securities and Exchange Commission said today in a statement announcing the case. The SEC also brought a civil claim against the former Microsoft worker, David Zilkha, saying he concealed his actions during an earlier probe.

“The cases have two particularly troubling aspects -- a hedge-fund manager trading on illegal insider information, and his tipper source who withheld crucial information about the scheme during an SEC investigation,” Robert Khuzami, the agency’s enforcement director, said in the statement. “Both are high-priority targets.”

Senators including Iowa Republican Charles Grassley have criticized the SEC’s decision in 2006 to close an examination of Pequot’s trades, including scrutiny of Morgan Stanley Chairman John Mack. Interest was rekindled last year after investigators got copies of e-mails between Zilkha and a Microsoft colleague from a hard drive in possession of Zilkha’s ex-wife.

‘Unnecessary Delays’

“Federal regulators have finally followed the evidence to its logical conclusions after years of unnecessary delays and timidity,” Grassley said in a statement today. “There was clearly a case to be made against Pequot, and the SEC has finally admitted it.”

Jonathan Gasthalter, a spokesman for Samberg, 69, and Wilton, Connecticut-based Pequot, declined to comment. Samberg and Pequot didn’t admit or deny wrongdoing when agreeing to settle.

Zilkha’s attorney, Henry Putzel, didn’t return a phone call seeking comment. Microsoft spokesman Peter Wootton declined to comment. The Redmond, Washington-based company wasn’t accused of wrongdoing.

In April 2001, Zilkha, now 41, was planning to leave Microsoft and join Pequot when Samberg e-mailed him, seeking information on whether the company would miss quarterly earnings estimates. “Any tidbits you might care to lob in would be appreciated,” Samberg wrote, according to the SEC’s claim.
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This crook has a face albeit he did not have to admit anything...