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S.E.C. Complaint Against Thomas Hardin, Aka Tipper X

S.E.C. Complaint Against Thomas Hardin, Aka Tipper X

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Published by Zach Kouwe
Securities and Exchange Commission's insider trading complaint against Thomas. C. Hardin, referred to as "Tipper X," in the allegations against the hedge fund firm, Galleon Group. http://www.nytimes.com/2010/01/13/business/13insider.html?_r=1&dbk
Securities and Exchange Commission's insider trading complaint against Thomas. C. Hardin, referred to as "Tipper X," in the allegations against the hedge fund firm, Galleon Group. http://www.nytimes.com/2010/01/13/business/13insider.html?_r=1&dbk

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Published by: Zach Kouwe on Nov 15, 2010
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11/15/2010

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IV.
_
.ff'(
':,
10
c:.
George S. Canellos
Attorney
for
PlaintiffSECURITIES
AND
EXCHANGE COMMISSION
New
York
Regional Office3
World
Financial Center,
Suite 400New
York,
NY 10281-1022(212) 336-1100
UNITEDSTATES
DISTRICT
COURTSOUTHERN
DISTRICT
OF
NEW YORK
SECURITIES
AND
EXCHANGE COMMISSION,
10Plaintiff,-against-
COMPLAINTTHOMAS
C.
HARDIN,
Defendant.Plaintiff Securities and Exchange Commission ("Commission") for its Complaintagainst defendant Thomas Hardin ("Hardin"), alleges as follows:
SUMMARY
1.
This case involves insider trading by Hardin, a former Managing Directorat New York-based hedge fund investment adviser Lanexa Management, LLC("Lanexa"), in the securities
of
Hilton Hotels Corp. ("Hilton"), Google, Inc. ("Google"),and Kronos Inc. ("Kronos"). Hardin traded based on material nonpublic informationconcerning takeovers
of
Hilton and Kronos and a Google quarterly earningsannouncement that Hardin received from Roomy Khan ("Khan"), an individual investorwho had, herself, received
such
information from various inside sources.
 
7
2. Khan tipped Hardin to material nonpublic information she received fromDeep Shah ("Shah"), a Moody's rating agency analyst, about
an
impending takeover
of
Hilton by The Blackstone Group. Hardin traded on the information on behalf
of
Lanexaand also passed the information to his friend, Gautham Shankar ("Shankar"), aproprietary trader at Schottenfeld Group LLC ("Schottenfeld"), a New York-basedbroker-dealer, and Shankar also traded on the information. Shankar also passed theinformation on to others at Schottenfeld who traded
on
the information.
3.
In
addition, Khan tipped Hardin to material nonpublic information aboutGoogle's Q2 2007 earnings that she received from an employee at Market Street Partners,an investor relations consulting firm that did work for Google. Hardin traded on theinformationonbehalf
of
Lanexaandalsotipped Shankar,who similarlytradedonthe·information.4. Further, Khan also tipped Hardin to material nonpublic information aboutthe impending acquisition
of
Kronos Inc. by Hellman
&
Friedman that she received fromShah, who had first received the information from Shah's friend. Hardin traded on theinformation on behalf
of
Lanexa and also tipped Shankar, who similarly traded on theinformation. Shankar also tipped others at Schottenfeld who traded based
on
theinformation.
NATURE
OF
THE PROCEEDINGS AND RELIEF SOUGHT
5. The Commission brings this action pursuant to the authority conferredupon it by Section 20(b)
of
the Securities Act
of1933
("Securities Act") [15 U.S.c.
§
77t(b)] and Section 21(d)
of
the Securities Exchange Act
of
1934 ("Exchange Act") [15U.S.C.
§
78u(d)]. The Commission seeks a permanent injunction against defendant
2
 
Hardin enjoining him from engaging in the transactions, acts, practices, and courses
of
business alleged in this Complaint, disgorgement
of
all profits realized or losses avoidedfrom the unlawful insider trading activity set forth herein together with prejudgmentinterest thereon, and civil penalties pursuant to Section 20(d)
of
the Securities Act [15U.S.c. § 77t(d)] and Section 21(d)(3)
of
the Exchange Act [15 U.S.C. § 78u(d)(3)]. TheCommission also brings this action pursuant to Section 21A
of
the Exchange Act [15U.S.C. § 78u-l] for civil penalties against defendant Hardin under the Insider Tradingand Securities Fraud Enforcement Act
of
1988, and for such other relief as the Court maydeem appropriate pursuant to Section
21
(d)(5)
ofthe
Exchange Act [15 U.S.C. §78u(d)(5)].
JURISDICTION AND VENUE
6. This Court has jurisdiction over this action pursuant to Sections 20(b),20(d), and 22(a)
ofthe
Securities Act [15 U.S.C.
§§
77t(b), 77t(d), and 77v(a)] andSections 2I(d), 21(e), and 27
of
the Exchange Act
[15
U.S.C.
§§
78u(d), 78u(e), and78aa].7. Venue lies in this Court pursuant to Sections 20(b) and 22(a)
of
theSecurities Act
[15
U.S.C.
§§
77t(b)and
77v(a)], and Sections 21(d),
2IA
and 27
of
theExchange Act [15 U.S.C.
§§
78u(d), 78u-I and 78aa]. Certain
of
the acts, practices,transactions and courses
of
business alleged herein occurred within the Southern District
of
New York. For example, defendant Hardin lived in New York, New York, andworked at Lanexa's New York, New York offices during the time
of
the insider tradingalleged herein. In addition, many
of
the communications in furtherance
of
the insidertrading alleged herein were made from, to, or within New York, New York.3

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