Home -> Law Blog Directory -> Criminal Law Blogs -> NASD, SEC and Regulatory Defense Blog

Criminal Law

: NASD, SEC and Regulatory Defense Blog

Pursuing Insider Trading Involving Credit Default Swaps: A Dubious Use Of SEC Resources

By Michael MacPhail, Esq.

        On May 5, 2009, the SEC filed its first insider trading case involving credit default swaps.  According to its complaint in SEC v. Rorech, Civ. No. 09 CV 4329,( S.D.N.Y.), a former portfolio manager at a hedge fund investment adviser and a salesman at Deutsche Bank Securities Inc., engaged in insider trading in the credit default swaps of VNU, an "international holding company." According to SEC's complaint, the portfolio manager learned information from investment bankers about a change to a proposed VNU bond offering that was expected to increase the price of the CDs on VNU bonds. Deutsche Bank was the lead underwriter for a proposed bond offering by VNU.  According to the complaint, the salesman illegally tipped the portfolio manager about the contemplated change to the bond structure, and the salesman then purchased CDs on VNU for a hedge fund...continue to full post

Full post as published by NASD, SEC and Regulatory Defense Blog on May 14, 2009 (boomark / email).