SEC settlement ends saga for former Ameriprise exec who aided SAC Capital insider case
Portfolio manager who helped feds must pay $390K, will do no prison time.
A former Ameriprise Financial Inc. money manager who pleaded guilty to securities fraud must pay $390,103, a figure roughly equal to the gains regulators said her funds earned based on an insider tip about Yahoo.
Law enforcement officials said Reema D. Shah, a tech-stock picker for Ameriprise subsidiaries, illegally recommended Yahoo Inc. stock in 2009 on the basis of nonpublic information about a search engine partnership between the Sunnyvale, Calif., technology firm and Microsoft Corp. The SEC said the source of the information was Robert W. Kwok, a former Yahoo executive, whom Ms. Shah had given inside information a year earlier about another company, Autodesk Inc.
The payment will resolve the criminal and civil proceedings against Ms. Shah, who was already sentenced in October to two years of probation and ordered to pay $511,751 in fines and forfeitures.
Ms. Shah — who government officials said regularly traded inside information between 2004 and 2009 with hedge fund managers, research analysts, consultants, as well as Mr. Kwok — avoided prison time. The two criminal counts she pleaded guilty to carry a maximum term of 25 years.
Ms. Shah cooperated extensively with federal agencies including the FBI, who credit her with information and wiretaps and other recordings that aided a number of insider-trading investigations, including the case against SAC Capital Advisors. That firm agreed to pay a record $1.8 billion in penalties and to stop managing outside money in Nov. 2013.
The SEC said it declined to impose an additional penalty “in light of” Ms. Shah’s cooperation and guilty plea in the criminal case.
Ms. Shah’s lawyer, Ted W. Cassman at the firm Arguedas, Cassman & Headley, did not respond to a telephone call or email seeking comment.
Authorities said her Yahoo tip earned her firms’ funds hundreds of thousands in profits, in particular the Seligman Communications and Information Fund (SLMCX), a mutual fund that now operates under the Columbia Management brand.
“Ms. Shah left Seligman years ago and her actions were clear violations of our strict policies and procedures related to material, nonpublic information,” Paul B. Goucher, an Ameriprise lawyer, said in a statement. He declined to comment further.
Mr. Kwok, the Yahoo executive, also pleaded guilty and has been ordered to pay $16,110. He was also sentenced to two years of probation.
Mr. Kwok’s attorney, Laura Grossfield Birger at the law firm Cooley, declined to comment. Yahoo did not respond to an email seeking comment.
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