Prior to the official sentencing of "Insider Trading Kingpin" Raj Rajaratnam, the SEC announced that, on 9/30/11, Federal Judge Jed Rakoff for the Southern District of New York, entered a Final Judgment on Consent as to Steven Fortuna and many others in the SEC's insider trading case, SEC v. Galleon Management, LP, et al. That same day, the Court entered the SEC's Notice of Dismissal as to S2 Capital Management, LP.  The SEC had filed its action on 10/16/09, which alleged that Galleon's Raj Rajaratnam, Fortuna, S2 Capital, and others engaged in a widespread insider trading scheme involving hedge funds, industry professionals, and corporate insiders. At the time of the alleged conduct, Fortuna resided in Westwood, MA,.  Fortuna was a co-founder and principal of S2 Capital, which was an unregistered hedge fund investment adviser in New York, City.  S2 Capital served as the investment adviser to the hedge fund S2 Capital Fund, LP. During the relevant time period, S2 Capital had over $125 million in assets under management. SEC Allegations Against Fortuna, S2 Capital. Fortuna and S2 Capital allegedly violated the federal securities laws by trading on the basis of material nonpublic information concerning quarterly earnings of Akamai Technologies, Inc. and on Advanced pending transactions by Micro Devices Inc. with 2 Abu Dhabi sovereign entities. Fortuna and S2 Capital learned the inside information from Danielle Chiesi, a consultant and portfolio manager at New Castle Funds LLC, then an RIA based in White Plains, NY.  Specifically, in July 2008, an Akamai executive tipped Chiesi about Akamai's disappointing earnings for Q2 of 2008. Chiesi the tipped others, including Fortuna, who traded on that information on behalf of S2 Capital.  Similarly, in October 2008, executives at IBM and AMD provided Chiesi with information concerning AMD's pending transactions with the Abu Dhabi entities. Chiesi tipped others, including Fortuna, who traded based on that information on behalf of S2 Capital. The Final Judgment . Fortuna was found to have violated of Section 17(a) of the Securities Act of 1933,  and thus was held liable for disgorgement of nearly $200K plus prejudgment interest thereon in the amount of $11,oo0.  The firm was also ordered to pay a civil penalty for $97,000.  Fortuna separately pleaded guilty in a parallel criminal case and has been cooperating with with federal prosecutors and investigators.  The SEC dismissed its case against S2 Capital, an entity which has ceased operations and is essentially defunct. SEC Settlement with Schottenfeld Trader. At the same time, the SEC agreed to  settle with Gautham Shankar, a prop trader at broker-dealer Schottenfeld.  Shankar agreed to a $243K disgorgement, prejudgment interest of $34K, and a civil penalty to be named later. The SEC also entered  into a settlement with Ali Hariri, an Atheros Communications, Inc. executive, who was permanently barred him from acting as an officer or director of any public company.  He's also liable for nearly $3K in disgorgement and prejudgment interest. Other Settlements. The SEC entered into a settlement with others in the Galleon Insider Trading Ring -

• Robert Moffat (SVP and Group Executive of IBM's Systems and Technology Group).
• Mark Kurland (CEO of New Castle Funds LLC),
• New Castle, in which the Commission dismissed its claims because the firm is no longer operating as an investment advisor and has filed Form ADV-W engage in further operations.
• Rajiv Goel, former MD in the treasury group of Intel Corp., and Director of Strategic Investments at Intel Capital, an Intel subsidiary that makes proprietary equity investments in technology companies.
• Roomy Khan, an individual investor who had been employed at Intel in the late 1990s and had been subsequently employed at Galleon.
• Anil Kumar, former director at the global consulting firm McKinsey & Co.,.
• Schottenfeld Group, LLC, a NY LLC and registered B/D, pursuant to which Schottenfeld is permanently enjoined from violating the antifraud provisions of the federal securities laws, Section 10(b) of the Exchange Act, Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act, and is required to pay disgorgement of $460,5K plus prejudgment interest of $72.2K, and a civil penalty of $230.2K - representing 50% of the disgorgement amount, a discount from a one-time penalty in recognition of its agreement to cooperate.   Schottenfeld also agreed to implement enhanced policies and procedures to prevent future securities laws violations, as well as to retain an independent consultant to review its policies and procedures.
• Choo-Beng Lee and Ali T. Far, who were both managing members of Far & Lee LLC, a Delaware limited liability company.
• Dismissed its claims against Far & Lee and Spherix, which are now defunct or nearly so, in exchange for their agreement to cooperate and cease doing business.

For further details, go to:   [SEC Litigation Release 22114, 10/5/11]