Two partners at San Jose-based Spherix Capital have agreed to pay $2.1 million to settle an SEC lawsuit that was filed by the agency in connection with the ongoing investigation of an insider trading ring centered at Galleon Group in New York.
Ali Far and Richard Choo-Beng Lee pleaded guilty to criminal charges and will pay $667,809 in civil penalties and over $1.4 million in interest. The SEC estimates that the civil penalties account for 50% of the their trading profits/losses avoided. The penalty was discounted due to the individuals' continuing cooperation with a federal probe of more than 21 traders.
Lee's lawyer, when contacted for comment by the Wall Street Journal, stated that Lee himself did not receive many of the insider trading profits.
"If approved [the settlement] will include full disgorgement for the trades alleged in the SEC complaint as it relates to Mr. Lee. Much of the proceeds subject to disgorgement were not retained by Mr. Lee or Spherix but were instead distributed to investors."
— Cynthia Foster