Hedge Fund Reader : Massachusetts-based hedge fund manager held for insider trading

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October 13, 2005

Massachusetts-based hedge fund manager held for insider trading

The Securities and Exchange Commission charged a Massachusetts-based Global Time Capital Management, LLC, hedge fund manager – Mr. Michael Tom. He and three other defendants has been accused of his role insider trading and gaining around $750,000 on the Citizens Financial Group, Inc. publicly undisclosed information of its acquisition of its acquisition of Cleveland-based Charter One Financial Inc. in 2004. Mr. Tom incidentally was a former employee of Citizens Bank. As per the reports, Ms. Shengnan Wang, then an employee of Citizens Financial passed on the information about Citizens’ performing its final due diligence for the acquisition of Charter One to her husband, Mr. Hai Liu and Mr. Tom. And, since Ms. Wang and her husband had invested approximately $60,000, in GTC Growth Fund run by Mr. Tom, to make undue returns. Mr. Tom purchased Charter One call options in his name and in a joint account held with his wife and in accounts managed for his wife and in-laws. On public disclosure Charter One’s stock rose more than 22 per cent after the deal was announced. By this time they had made their gains and sleeping tight, till the regulators knocked on their door. Boston.com Reports:

Michael Tom also traded Charter One securities before Citizens' announcement in a joint account he held with his wife and in accounts he managed for his wife and in-laws, regulators said. According to the complaint, Michael Tom's trading in Charter One securities resulted in total profit of $743,505.

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October 13, 2005 in Gossip & Scandal | Permalink