[News] Pequot Capital Took Staff from Microsoft, Made Money That Way, Paid SCO

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"On the same day that CA blasted SCO, Open Source evangelist 
Eric Raymond revealed a leaked email from SCO's strategic 
consultant Mike Anderer to their management. The email details 
how, surprise surprise, Microsoft has arranged virtually all of SCO's
 financing, hiding behind intermediaries like Baystar Capital."

                   --Bruce Perens

SEC settles charges with Pequot firm over insider trading

,----[ Quote ]
| Pequot Capital Management and its chief 
| executive, Arthur Samberg, agreed to pay 
| $28 million to settle the SEC's charges 
| that the firm traded shares of Microsoft 
| based on insider information. 


"Integral Capital Management" and "Pequot Ventures / Pequot Capital Management" 
have been buying huge chunks of SCO stock. There's a pretty short version of 
those degrees-of-separation chains leading back to MSFT if you're a conspiracy theorist. 


Pequot Capital to Shut Amid SEC Insider-Trading Probe (Update2) 

,----[ Quote ]
| The U.S. Securities and Exchange Commission 
| in January resumed a probe into whether 
| Samberg’s funds illegally profited in 2001 
| by trading on inside information about 
| Microsoft Corp., people familiar with the 
| matter said at the time. That was about a 
| year after the agency told Samberg and 
| Morgan Stanley Chief Executive Officer John 
| Mack they wouldn’t be accused of wrongdoing 
| related to insider trading. 


SCO's 10K, MyDoom, and the Morgan Keegan letters

,----[ Quote ]
| VSpring Capital (SCO)
| Vector Capital (SCO)
| IDG Ventures (Broadmark)
| Group Atlantic Partners, LLC (Broadmark)
| Paladin Capital Group (Broadmark)
| Pequot Capital (Broadmark)
| Technology Crossover Ventures (Broadmark)
| Ram Capital Resources, LLC (Impact Capital)
| Crestview Capital Fund (Impact Capital) 


Finally: Fried Frank, Wachtell on Pequot Insider Trading Settlement

,----[ Quote ]
| Fried, Frank, Harris, Shriver & Jacobson 
| and Wachtell, Lipton, Rosen & Katz played 
| key roles brokering a $28 million 
| settlement that resolves a long-simmering 
| allegation that Pequot Capital Management, 
| the Westport-based hedge fund, committed 
| insider trading in Microsoft securities in 
| 2001, according to SEC officials. 
| The SEC filed suit against Pequot and its 
| chairman, Arthur Samberg, today and 
| announced at the same time that Pequot and 
| Samberg agreed to pay $28 million combined 
| in disgorged profits and penalties to 
| settle the case. (They did not admit or 
| deny guilt.) Federal investigators had been 
| looking into the allegations since at least 
| 2005 but closed early investigations after 
| failing to find enough evidence to bring a 
| case, according to our prior reporting. But 
| then something happened that didn't help 
| Pequot: The employee at the center of the 
| case got divorced, and e-mails implicating 
| the employee, David Zilkha, in the insider 
| trading scheme came to light in filings. 
| Zilkha joined Pequot in 2001 after working 
| for Microsoft, and he used his contacts at 
| Microsoft to tip Pequot to the fact that 
| Microsoft was about to release a better-
| than-expected earnings report in the spring 
| of 2001. Pequot then made $14 million on 
| trades of Microsoft securities, according 
| to the SEC's complaint. 


Feds Charge Two In Insider-Trading Plot Involving Disney

,----[ Quote ]
| Wowza. Folks out at Disney’s HQ in Burbank, 
| Calif., are probably doing a bit of glassy-
| eyed headshaking on Wednesday, in wake of a 
| criminal complaint filed a few hours ago.
| The complaint, filed by federal prosecutors 
| in Manhattan, has alleged that a former 
| administrative assistant to Disney’s head 
| of communications and her boyfriend tried 
| to sell advance access to the company’s 
| second-quarter earnings reports. Click here 
| for the WSJ story; here for the criminal 
| complaint. 



Microsoft exec dumped stock prior to Red Ring announcement

,----[ Quote ]
| To make matters more murky, the sales were not registered with the Securities 
| and Exchange Commission within the mandatory two days of the transaction, a 
| result of an alleged "administrative error." Microsoft has since remedied the 
| issue by following the "procedures required of late-filers."   


Microsoft's Bach sold more stock before Xbox news

,----[ Quote ]
| Microsoft Corp. executive Robbie Bach sold $3 million more in company stock 
| during the period leading up to an announcement about a costly flaw in its 
| Xbox video game console than previously reported, according to a filing 
| Monday with the Securities and Exchange Commission.   


Insider Trading Hasn't Affect Microsoft Stock - Yet

,----[ Quote ]
| MarketWatch.com reports that Robbie Bach, president of Microsoft's
| Entertainment and Devices division, sold $6.2 million of Microsoft
| stock just prior to announcing that Microsoft was going to have to 
| extend XBox 360 warranties to three years because of extensive 
| failures. The filings note that this was not part of any 
| scheduled diversification or selling program; this was a 
| conscious, unscheduled sale by the guy in charge of releasing 
| news that could affect the value of Microsoft stock.
| [...]
| Insider trading is a very serious violation of the law; just 
| ask Martha Stewart, who served five months in prison for 
| avoiding losses of $43,000 through trades that just had suspicious 
| timing (no insider trading was actually proven). This is $6.3 
| million that went straight into Robbie Bach's pocket.


,----[ Quote ]
| A Connecticut divorce judge ordered Tuesday that $250,000 be placed in escrow
| that a hedge fund planned to pay a former Microsoft employee amid a federal
| investigation of possible insider trading.
| [...]
| The Securities and Exchange Commission earlier this year reopened its probe
| of possible insider trading at Pequot. It's investigating if Pequot traded
| Microsoft Corp.  ( MSFT -  news  -  people ) shares on confidential
| information provided by Zilkha, whom it had hired.

Version: GnuPG v1.4.10 (GNU/Linux)


Reply Roy 5/30/2010 11:02:19 AM

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