The Securities and Exchange Commission has charged two men with insider trading after they learned that hedge fund manager Bill Ackman was betting against Herbalife Ltd.'s stock.
The SEC says Filip Szymik was told by his roommate, then an analyst at Ackman's hedge fund, Pershing Square Capital Management, that Ackman was going to announce a negative view of Herbalife Ltd. Szymik then told another friend, Jordan Peixoto, according to the SEC.
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The SEC says Peixoto bet against Herbalife stock a day before Ackman made the announcement in December 2012, earning him $47,100.
The SEC settled with Szymik, who did not make any Herbalife trades. He will pay a $47,100 penalty. Szymik did not admit any wrongdoing.
A lawyer for Peixoto says he will fight the allegations.