By Saabira Chaudhuri
The U.S. Securities and Exchange Commission on Friday charged a
South Pasadena, Calif.-based wealth management company and a former
fund manager with insider trading of shares of Dell Inc. (DELL),
Nvidia Corp. (NVDA) and Wind River Systems, the agency's latest
crackdown in an ongoing insider trading investigation.
The SEC alleges Whittier Trust Co. and fund manager Victor Dosti
participated in an insider trading scheme involving the securities
of these companies.
Whittier Trust and Mr. Dosti agreed to pay nearly $1.7 million
to settle the charges, although they neither admit nor deny the
SEC's charges.
A representative of Whittier Trust didn't immediately respond to
a request for comment.
According to the SEC's complaint filed in U.S. District Court
for the Southern District of New York, Mr. Dosti used nonpublic
information obtained from employees at Dell and Nvidia to trade in
advance of five quarterly earnings announcements in 2008, 2009 and
2010. They say Mr. Dosti reaped profits and avoided losses of more
than $475,000 for Whittier Trust funds.
The agency also says Mr. Dosti made $247,000 in illicit profits
for Whittier Trust funds by trading Wind River stock on
confidential information that he obtained from Danny Kuo, a
Whittier Trust fund manager he supervised. Mr. Kuo, who was charged
by the SEC in January of last year, allegedly obtained the
information from an Intel Corp. (INTC) employee about the company's
confidential negotiations to acquire Wind River in 2009.
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.
The latest announcement comes on the heels of an emergency court
order obtained by the SEC to freeze the assets of a trader in
Bangkok, who allegedly profited more than $3 million by trading in
advance of Smithfield Foods Inc.'s (SFD) acquisition announcement
last week.
Prior to that, in February, the SEC moved to freeze a bank
account that traded in options of ketchup giant Heinz before it
reached a deal to sell to Brazilian private-equity firm 3G Capital
and Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB).
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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