Omega's Cooperman accused by SEC of insider trading in Atlas deals

Billionaire investor Leon Cooperman, head of the Omega Advisors hedge fund, was accused of insider trading by U.S. regulators Wednesday in a case involving his dealings with Atlas Pipeline Partners of Pennsylvania.

The Securities and Exchange Commission said Cooperman, 73, used his status as one of the largest shareholders in Atlas - which had executive offices in Philadelphia - to obtain confidential information from a company executive, according to a statement released Wednesday by the regulator.

Atlas was among a group of companies founded by members of the Cohen family - parents Edward and Betsy, and sons Daniel and Jonathan. The best-known of those companies was Jefferson Bank, sold in the late 1990s.

Cooperman earned about $4 million by buying securities in Atlas, where Edward and Jonathan Cohen were executives, before the sale by Atlas of an Oklahoma natural-gas processing plant in 2010, which caused shares to jump 31 percent, the SEC said.

"We allege that hedge fund manager Cooperman, who, as a large APL shareholder, obtained access to confidential corporate information, abused that access by trading on this information," Andrew Ceresney, head of SEC's division of enforcement, said in a statement.

Most of Atlas Pipeline and a related company, Atlas Energy, headquartered in Pittsburgh, was sold in 2014 for $5.9 billion.

Ed Cohen was chairman and chief executive of Atlas Pipeline at the time of the sale in question. He did not respond Wednesday to an emailed request for an interview. Cohen and Atlas are not accused of benefitting.

Omega Advisors, Cooperman's New York-based firm, with $5.4 billion in assets under management as of Aug. 31, is among the oldest in the industry.

Cooperman said in a letter Wednesday to Omega investors that he strongly disagreed with the SEC's allegations and that the firm hasn't engaged in any unlawful conduct.

When Omega Advisors received a subpoena about its trading in Atlas in 2011, Cooperman contacted an unidentified Atlas company executive and told him to try to fabricate a story, according to the SEC. The executive was shocked and angered when he learned that Cooperman had traded in advance of Atlas' announcement, the regulator said.

Cooperman had previously told a consultant to Omega that Atlas was a bad business, and took a bearish position on the stock in the first half of 2010, the SEC said. He bet on the shares rising after receiving the material nonpublic information, the regulator said.

After learning about the Atlas asset sale, Cooperman began buying call options and other securities.

In addition to the insider trading, the SEC said Cooperman violated federal securities laws more than 40 times by failing to disclose or delaying disclosure of the fact that his firm had breached a 5 percent ownership threshold in eight different companies. Had his stakes been known to the broader market, the stock prices probably would have been pushed higher. As a result, Cooperman was permitted to trade at "advantageous prices," the SEC said.

The SEC's complaint seeks disgorgement of ill-gotten gains plus interest and penalties against Cooperman and Omega Advisors.

Staff Writer Harold Brubaker contributed to this article.