The Securities and Exchange Commission today announced the award of $1 million to Glen Kaiser and Karen Kaiser of Southbury, Connecticut, who provided information and documents leading to the imposition and collection of civil penalties in the above litigation. This is the largest award paid by the SEC for information provided in connection with an insider trading case.

The SEC staff previously investigated alleged insider trading in Microsoft Corp. securities by hedge fund adviser Pequot Capital Management, Inc., its chief executive, Arthur J. Samberg, and David E. Zilkha, a Microsoft employee who accepted an employment offer at Pequot, but closed its investigation without action. In late 2008, Karen Kaiser, the ex-wife of Zilkha, and her husband, Glen Kaiser, learned key evidence that ultimately led to the filing of a settled enforcement action against Defendants Pequot and Samberg alleging they engaged in insider trading. Among other documents and information the Kaisers provided the SEC was a key email communication between Zilkha and another Microsoft employee that was not turned over to the SEC in the first investigation. Without admitting or denying the allegations in the SEC’s complaint, Pequot and Samberg consented to the entry of injunctions and orders requiring the payment of civil penalties totaling $10 million (as well as the payment of disgorgement and prejudgment interest totaling over $17 million and an investment advisory bar as to Samberg and censure as to Pequot).

SEC Awards $1 Million for Information Provided in Insider Trading Case is a post from: Before You Invest Your Money

The new case, filed Monday in New York State court, is reminiscent of the SEC’s case against Goldman Sachs over a CDO deal gone terrible. But, in the UBS case, it is the bank that is claiming to be the wronged party.

UBS is alleging that Highland didn’t tell it about some of its counterparties’ weaknesses when the bank consented to restructure the CDO deal after losses started piling up 2007.

UBS re-Files Highland Capital CDO Case is a post from: Before You Invest Your Money

In August 2008, the part-nationalised lender paid Goldman $841m (£545m) to close its position on the single trade. According to the US Securities & Exchange Commission, “most of this money was subsequently paid to Paulson”. RBS bought the problem trade in 2007 after buying ABN Amro, the Dutch bank that ultimately proved the cause of its downfall.

RBS went on to post a £24bn loss in 2008, which led to a £45.5bn taxpayer bail-out that has left the state with an 84pc stake in the bank.

Following the SEC’s accusations yesterday, RBS’s lawyers were examining whether there would be any action to take against Goldman to recover losses.

RBS found itself bearing the bulk of the losses because ABN had written insurance against the “synthetic collateralised debt obligation (CDO)” at the centre of the alleged fraud.

But, according to the SEC, Goldman convinced investors to buy a poor quality CDO in the full expectation that it would collapse. Paulson, which was shorting the product, is alleged to have selected the sub-prime mortgage assets to be referenced by the “synthetic CDO” that were most likely to default.

Goldman then sold the CDO to investors to place someone on the other side of the trade without revealing Paulson’s involvement. Investors would have believed the sub-prime assets to be high quality.

RBS lost £545m in alleged Goldman fraud is a post from: Before You Invest Your Money

The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to tell to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a small position against the CDO.

“The product was new and complex but the deception and conflicts are ancient and simple,” said Robert Khuzami, Director of the Division of Enforcement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

Kenneth Lench, Chief of the SEC’s Structured and New Products Unit, added, “The SEC continues to investigate the practices of investment banks and others involved in the securitization of complex financial products tied to the U.S. housing market as it was beginning to show signs of distress.”

The SEC alleges that one of the world’s largest hedge funds, Paulson & Co., paid Goldman Sachs to structure a transaction in which Paulson & Co. could take small positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages is a post from: Before You Invest Your Money

According to the regulatory body, two senior executives and one professional from a hedge fund are among those arrested in connection with insider deals.

The unnamed workers were taken into custody following searches in 16 locations across London, the South East and Oxfordshire.

A number of computers and documents were seized from addresses, which included both business and residential premises.

In a statement, the FSA said: “It is believed that the city professionals passed inside information to traders (either directly or via middlemen) who traded based on this information and have made significant profits as a result.”

The investigation is the fifth set of arrests in conjunction with insider dealing that the organisation has carried out since 2008.

A number of traders have recently been imprisoned due to their involvement in insider deals.

Malcom Calvert, Matthew and Neel Uberoi and Christopher McQuoid and James Melbourne are the individuals which have received jail sentences following an investigation by the FSA.

FSA insider trading probe leads to six arrests in Great Britain is a post from: Before You Invest Your Money

Chicago billionaires : Oprah, Citadel’s Griffin, Crown family is a post from: Before You Invest Your Money