The New York hedge-fund magnate Leon Cooperman, accused Wednesday of buying shares in Atlas Pipeline Partners after obtaining insider information, has been investing with the family that managed that company for more than a decade. It hasn't always paid off.
Cooperman, 73, and son Wayne bought stakes in at least five companies controlled or managed by Philadelphia native Edward E. Cohen and his sons Jonathan and Daniel since 2000, including Atlas Resource Partners LP, Atlas Energy Group LLC, Resource America Inc., and Institutional Financial Markets Inc. Some have lost money for investors - in two cases, more than 80 percent of their value on public exchanges.
Led by Edward Cohen and his wife, Betsy Zubrow Cohen, the Cohens have run a string of publicly traded companies in finance, energy, and real estate.
Edward and Jonathan ran the natural gas production, pipeline, and real estate companies from offices in Philadelphia. Betsy, with help from Daniel, ran the former Jefferson Bank, which financed much of Philadelphia's "restaurant renaissance" before it was sold in 1999, then started Bancorp in Wilmington.
The Cohen sons, raised on Rittenhouse Square, have lately managed investment banking and real estate investment businesses from offices in New York; the parents are based in Sarasota, Fla., but often visit Philadelphia, where Edward Cohen is an adjunct professor of classical studies at the University of Pennsylvania, where he went to college and law school.
The Coopermans have often been among the Cohens' biggest investors.
"Atlas Pipeline was one of several companies controlled by the Cohen family, a number of whose members I had known for many years," the elder Cooperman wrote in a letter to shareholders of his $5.4 billion New York hedge fund, Omega Advisors, hours after he was accused of insider trading by the Securities and Exchange Commission. Cooperman also said in the letter that he and his firm had not engaged in any unlawful conduct.
"We haven't spoken for a year because of litigation," Cooperman said in an email Wednesday on his relations with the Cohens. "You're not allowed to talk."
Wayne Cooperman did not return a phone call or respond to an email. Matt Barkett, a spokesman for the Cohens' companies, said he was not immediately able to provide a comment. The SEC has not accused Atlas or its executives of wrongdoing.
Cooperman was accused of insider trading in Atlas Pipeline after obtaining confidential information from an Atlas Pipeline executive in 2010 about the sale of a company asset that caused the shares to jump 31 percent, according to an SEC statement. Cooperman, who had owned 9 percent of Atlas Pipeline, had described it as a bad business just before buying more of its securities, the complaint said.
"The SEC is relying on a theoretical calculation of unrealized gains, not actual profits," Cooperman said Wednesday. "In actuality, I'm embarrassed to say the losses were gigantic."
The SEC complaint also mentions two other Cohen companies in which Cooperman had substantial stakes: Atlas Resource Partners, a gas and oil producer, and Resource America, which managed real estate investments. Cooperman failed to disclose purchases in Atlas Resource Partners in a timely fashion, and underreported his ownership in Resource America, according to the complaint.
The Cohens have had their own problems stemming from the Atlas businesses. When the family sold the energy companies to Targa Resources Corp. and Targa Resources Partners LP for $7.7 billion in February 2015, they spun off some remaining assets into a new company, Atlas Energy Group LLC, with Cooperman as the biggest shareholder. It has since lost 89 percent of its value to become a $32 million business.
The sale has spurred at least seven lawsuits alleging the Cohens structured the deal to line their own coffers at the expense of shareholders. Edward, who is CEO, and Jonathan, chairman, were paid a combined $137.5 million, mostly cash, as Atlas' stock plummeted in 2015, according to company filings. The compensation was derived from the predecessor companies, the filings said.
Staff writers Joseph N. DiStefano and Harold Brubaker contributed to this article.