Leon Cooperman's Omega Advisors Receives Wells Notice from SEC

Mar 21 2016 | 11:35pm ET

Leon Cooperman’s Omega Advisors has disclosed the receipt of a Wells notice from the U.S. Securities and Exchange Commission over trading in certain securities and the timing of certain regulatory filings.

An SEC Wells notice does not mean any law has been violated. However, they are often issued when the Commission is planning to pursue an enforcement action against the recipient, although SEC action does not always result. 

Cooperman revealed the notice in a letter to investors on Monday, according to Reuters, and was later quoted as saying it concerned the hedge fund’s trading in Atlas Pipeline Partners LP, a midstream pipeline operator. In the letter, Cooperman said he had been subpoenaed to appear at an interview with regulators on March 11 but had invoked his Fifth Amendment rights on the advice of counsel. 

The Wells notice also involves claims by the SEC that certain regulatory filings were not made on time, reported Reuters. Cooperman told investors on Monday that he believed no wrongdoing had been committed and that the government investigations would not have a meaningful impact on his company’s abilities.

Omega has gone through an uncharacteristically rough patch recently. The fund’s flagship fund is down approximately 6% so far this year, according to The Wall Street Journal, following a 10.4% loss last year and a -2.8% return in 2014. Beforehand, it booked an average annual return of 11% between inception in 1991 and 2013. 

Entirely self-made and known for an outspoken style, the former Goldman Sachs partner was a rare beacon of optimism when in mid-January, he recommended investors “hang tough” and that he felt a pervasive bear market in stocks was unlikely.

Omega has approximately $5.2 billion under management as of February 29, 2016 deployed primarily in long/short strategies.


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